The Trump administration has reclassified medical marijuana as a less dangerous drug, marking a significant shift in federal drug policy. The order, signed Thursday by the acting attorney general, moves medical marijuana from Schedule I to Schedule III under the Controlled Substances Act. This change does not legalize marijuana federally but could spur research and boost the cannabis industry.
What Is the Current Federal Policy on Marijuana?
Possessing marijuana remains a federal crime punishable by fines and prison time. Selling or cultivating it carries sentences of five years to life, depending on quantity. The new order does not alter these penalties for recreational marijuana, which stays a Schedule I drug. However, state-licensed medical marijuana will now be regulated less strictly, similar to ketamine and anabolic steroids.
What Does Reclassification Mean for Cannabis Businesses?
Businesses selling Schedule I or II drugs cannot deduct ordinary business expenses from federal taxes. Moving medical marijuana to Schedule III allows licensed sellers to claim deductions for advertising, rent, and labor. This could save millions, but complications arise for shops selling both medical and recreational cannabis. Attorney Irina Dashevsky noted it is "nonsensical" because the products are identical. Rachel Gillette added that it creates a "messy" situation for tax purposes.
The Justice Department recommended retroactive tax deductions for businesses operating under state medical licenses, but clarity is pending from the Treasury Department.
How Does the Public View Marijuana?
Public support for legalization has grown, with Gallup reporting 64% approval in 2025, down from 70% in 2023. The decline is driven by Republicans: support among them fell from 55% to 40%. Among Democrats, it dipped from 87% to 85%, and among independents from 69% to 66%. Over 20 Republican senators urged Trump to keep marijuana as a Schedule I drug, arguing it would undermine his agenda.
How Has Marijuana Use Changed?
Medical marijuana is legal in 40 states and D.C., while recreational use is legal in 24 states and D.C. In 2024, 22% of Americans aged 12 and older (over 64 million) used marijuana in the past year, up from 19% in 2021. Dr. Smita Das, an addiction psychiatrist at Stanford, warned that reclassification could reduce risk perception and increase cannabis use disorder, which is already rising.
The Justice Department has scheduled a June 29 hearing to consider broader reclassification of all marijuana to Schedule III.
