Medical marijuana reclassified as less dangerous drug under new order

The Trump administration is reclassifying state-licensed medical marijuana as a less dangerous drug, and also giving licensed operators a major tax break. 

The order, signed by President Donald Trump’s acting Attorney General Todd Blanche, is a historic policy change that will no longer treat marijuana like heroin on the federal level. It doesn’t legalize marijuana, but it does change the way it’s regulated. 

DOJ’s medical marijuana order

Big picture view:

The order moves licensed medical marijuana from Schedule I, which has no medical use and high potential for abuse, to the less strict Schedule III. Schedule III drugs are defined as having moderate to low potential for physical and psychological dependence.  

It also eases some barriers to researching cannabis, while establishing an expedited system for state-licensed producers and distributors to register with the U.S. Drug Enforcement Administration. The order says cannabis researchers can’t be penalized for using state-licensed marijuana or marijuana-derived products for use in their work. 

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For the first time, state-licensed medical marijuana companies will be allowed to deduct business expenses on their federal taxes. 

Marijuana products that are not distributed through a state medical marijuana program will continue to be classified in Schedule I. 

What they're saying:

Blanche said the Department of Justice is "delivering on President Trump’s promise." 

"This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information," he said in a statement.

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Blanche’s order sidestepped the review process by relying on a provision of federal law that allows the attorney general to determine the appropriate classification for drugs that the U.S. must regulate pursuant to an international treaty.

What's next:

The Trump administration is launching a new administrative hearing process beginning in June to consider the broader rescheduling of marijuana, not just for medical purposes. 

Where is medical marijuana legal? 

By the numbers:

Medical marijuana programs in 40 states will be impacted by the new order. Two dozen states, plus Washington, D.C., allow recreational use of marijuana, while eight others allow low-THC cannabis or CBD oil for medical use. 

Local perspective:

Only Idaho and Kansas ban marijuana outright.

The evolution of medical marijuana

The backstory:

The order represents a major policy shift for the U.S. government, which has continued its longstanding marijuana prohibition since 1937, despite most states moving to approve it in some form. 

The regulation of medical marijuana has come a long way since California became the first state to adopt it in 1996, Blanche wrote.

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"Today the vast majority of States maintain comprehensive licensing frameworks governing cultivation, processing, distribution, and dispensing of marijuana for medical purposes," Blanche wrote. "Taken as a whole, they demonstrate a sustained capacity to achieve the public-interest objectives ... including protecting public health and safety and preventing the diversion of controlled substances into illicit channels."

The Justice Department had also proposed reclassifying marijuana under former President Joe Biden. The DEA was still in the review process when Trump succeeded Biden. Trump issued an executive order in December 2025 to expedite the process, but it’s still under review. 

The other side:

Cannabis industry critics say legalization in the states has led to stronger and stronger cannabis products, which need to be researched rather than categorized less strictly than before.

More than 20 Republican senators, several of them staunch Trump allies, also signed a letter last year urging the president to keep marijuana as a Schedule 1 drug. 

Cannabis industry reacts

Dig deeper:

Cannabis stocks rose briefly Thursday following the announcement, but industry experts say it leaves recreational marijuana – which is often purchased from the same dispensary as medical marijuana – in limbo. They also question whether the move is legal. 

"Two people can be using cannabis together - the same product purchased from the same place - one labeled medical marijuana and the other labeled for adult-use," said Mike Feldman, general counsel for the cannabis wholesale platform Nabis. "And now in one is placed in Schedule 1 and in another in Schedule 3, and that's completely unprecedented, and that's not how the Controlled Substances Act works.

"The Controlled Substances Act is a federal statute creating federal schedules. Those schedules have always worked the same way: a substance is classified based on its properties, the same way in every state," he continued. "This order breaks that premise. It creates a regime where the same product, in the same packaging, is federally Schedule III or Schedule I, depending on where it is purchased. That has never been how drug schedules work, for opioids, for psychedelics, for anything."

"I support federal recognition of state medical programs. I also think the legal path the Attorney General chose raises serious questions that will eventually need to be resolved."