The Trump administration moved Thursday to reclassify cannabis under federal law, which could significantly expand scientific research into the drug's medical uses.
The change would not legalize the drug at the federal level, but would change cannabis' current status as a substance from Schedule I to Schedule III under the U.S. Drug Enforcement Administration's (DEA) controlled substances framework.
In a statement, the Justice Department said it will immediately move FDA-approved products containing marijuana to Schedule III along with items regulated by a state medical marijuana license. He also announced an expedited hearing in June to consider formally reclassifying cannabis into Schedule I at the federal level.
“Together, these actions provide immediate and long-term clarity to researchers, patients and providers alike, while maintaining strict federal controls against illicit drug trafficking,” the Justice Department said.
Schedule I drugs, which include heroin and LSD, are considered to have no accepted medical use and have a high potential for abuse. In contrast, Schedule III drugs, such as Tylenol with codeine and testosterone, are recognized as having medical applications and are subject to fewer regulatory restrictions.
The reclassification reduces long-standing barriers that have made it difficult for researchers to study cannabis in clinical settings.
The financial implications are also significant. It would exempt cannabis businesses from Section 280E of the IRS Code, allowing them to deduct standard expenses like rent and payroll for the first time, and opens the door to banking access that was previously prohibited.
Investors showed some skepticism of the move as cannabis stocks retreated from their initial gains and turned negative. Critics worry that the policy could create a two-track system for drug development that could allow developers to bypass the FDA process entirely in favor of state-level pathways.
Still, the move marks one of the most significant federal changes to marijuana policy in decades, signaling a growing willingness in Washington to reconsider how the drug is classified and studied in the United States.
The move could benefit companies like Tilray, known for its recreational cannabis products but which is expanding its medical segment. Tilray's medical business has served hundreds of thousands of patients in more than 20 countries, according to the company.
“We have the investigation to get to the FDA. We have the investigation to get to the DEA and show them what we've been doing,” said Tilray CEO Irwin Simon.
Simon told CNBC that he expects to hear from pharmaceutical companies interested in partnering with the United States, similar to the wave of outreach from alcohol companies following the surge in demand for hemp-derived beverages.
Tilray is currently partnered with Novartis in Canada.
Scientists have faced strict approval processes, limited access to supply and strict compliance requirements when trying to examine cannabis for therapeutic use, including chronic pain, post-traumatic stress disorder and neurological disorders. Those federal barriers remained in place even as about half of states legalized marijuana for recreational use and even more approved it for medical use.
“While operators would still face a fragmented state-by-state system, improved cash flow from rescheduling would support reinvestment, strengthen stability and help build momentum for more consistent standards over time,” said Wendy Bronfein, co-founder and chief brand officer of Curio Wellness, a Maryland-based cannabis company.
The action follows an executive order issued last year directing federal agencies to begin the reclassification process, which typically takes place over several years and involves scientific review, interagency coordination and rule-making procedures.
“This rescheduling is not the goal, it is the final stage of a race we have been running for decades,” said Shawn Hauser, partner at cannabis law firm Vicente LLP.
In 2024, the Biden administration began that process and presented the reclassification to the public during a 60-day comment period. After that window, the hearings to review possible obstacles stalled in the transfer between administrations.
The move also comes just days after President Donald Trump signed an executive order on psychedelics to accelerate research, clinical trials and “right-to-try” access for drugs such as psilocybin, MDMA and ibogaine.
