Trump Administration Reclassifies Medical Marijuana to Schedule III, Marking Major Federal Policy Shift

The Trump administration has moved to reclassify state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act, marking one of the most significant federal cannabis policy shifts in decades.

The order, signed by Acting Attorney General Todd Blanche, does not legalize marijuana at the federal level. However, it changes how state-licensed medical cannabis is regulated, placing it in a category defined as having moderate to low potential for dependence rather than no accepted medical use.

What Schedule III Means Legally

Under federal law, Schedule III substances are subject to less restrictive controls than Schedule I drugs, which include heroin and LSD. The reclassification applies specifically to cannabis distributed through state-licensed medical marijuana programs, while marijuana outside those systems remains classified as Schedule I.

The change also creates a pathway for licensed operators to register with the U.S. Drug Enforcement Administration under an expedited process, bringing them closer to formal federal compliance frameworks, as reported by AP.

Tax Relief and Research Expansion

One of the most immediate impacts of the policy is financial. State-licensed medical marijuana businesses will now be able to deduct standard business expenses on their federal taxes, a major shift from prior restrictions under Section 280E of the tax code.

The order also removes key barriers to scientific research. Researchers will no longer face penalties for obtaining cannabis from state-licensed sources, allowing for broader study of its safety and medical efficacy.

Impact on State Programs

The move effectively legitimizes medical marijuana systems across the United States. Currently, 40 states operate medical cannabis programs, while two dozen states and Washington, D.C., have legalized adult-use marijuana. Only a small number of states continue to prohibit cannabis entirely.

Federal officials acknowledged that state-level frameworks have matured over time, citing comprehensive licensing systems governing cultivation, processing, distribution, and dispensing.

What Comes Next

The Department of Justice indicated that a broader review of marijuana’s federal classification is still underway. A new administrative hearing process is expected to begin in June to consider further rescheduling decisions.

For now, the change applies only to state-licensed medical marijuana. Recreational cannabis remains federally illegal, and products outside regulated medical programs will continue to be treated as Schedule I substances.