The Trump administration has reclassified state-licensed medical marijuana from Schedule I to Schedule III under the Controlled Substances Act, effective Thursday, March 27, 2026.
Acting Attorney General Todd Blanche signed the order, which applies only to FDA-approved products and marijuana distributed through state-licensed medical programs. Recreational marijuana and medical marijuana not distributed through state programs remain classified as Schedule I.
Policy Change and Legal Status
The order moves medical marijuana from Schedule I (defined as substances with high abuse potential and no accepted medical use) to Schedule III (substances with moderate to low potential for dependence and accepted medical use). Schedule III includes drugs such as ketamine, anabolic steroids, and Tylenol with codeine.
The reclassification does not legalize marijuana under federal law. It does not affect sentences for possession, allow interstate transport without authorization, or remove banking restrictions related to anti-money laundering laws. The order also does not alter federal drug testing requirements, which await guidance from relevant agencies.
Implementation and Timeline
The order relies on Section 811 of the Controlled Substances Act, which allows the attorney general to classify drugs under international treaty obligations, potentially bypassing the standard Drug Enforcement Administration (DEA) review process and public comment period. This method was previously used for the CBD epilepsy drug Epidiolex in 2018.
The DEA will hold hearings on broader rescheduling starting June 29, 2026. The Justice Department is expected to balance the call for expedience with the need to defend its actions against anticipated legal challenges.
President Trump signed an executive order in December 2025 directing the attorney general to complete the rescheduling process. The president had expressed frustration with delays in the process, stating that federal officials were "slow-walking" the rescheduling. The announcement comes three weeks after Pam Bondi was fired as attorney general and replaced by Blanche.
Economic Impact
The reclassification is expected to provide immediate tax relief to state-licensed medical marijuana businesses by eliminating the applicability of Internal Revenue Code Section 280E. This provision currently prevents businesses dealing with Schedule I substances from claiming standard tax deductions for operational expenses such as rent and employee costs, resulting in higher effective tax rates.
Sam Brill, CEO of Ascend Wellness Holdings, stated that Section 280E "does not allow us to basically deduct normal expenses that everyone else can deduct." His company had set aside an estimated $38 million in reserves for 2024 due to these restrictions.
The ability of cannabis businesses to accept credit cards and access standard financial services is not expected to change immediately, as most financial institutions continue to avoid providing basic banking to state-authorized marijuana operations due to potential federal liability.
Impact on Medical Research
Researchers will no longer need a Schedule I license to study medical marijuana, and rigorous laboratory regulations for storage and security could be relaxed. However, challenges in obtaining marijuana for study persist.
Researchers are federally required to source cannabis from a limited number of approved facilities, a system that is separate from the controlled substances schedule.
Background
Marijuana had been classified as Schedule I since 1970, alongside heroin, LSD, MDMA, and synthetic opioids. This indicated a high abuse potential and no accepted medical use.
Forty states have medical marijuana programs; 24 states plus the District of Columbia allow adult recreational use. A Gallup poll conducted in November 2024 found that 64% of Americans believe marijuana should be legalized. An Economist/YouGov poll in March 2026 found 53% of adults support legalizing the drug, including 35% of Republicans. A survey by NuggMD found 83% support for Trump's executive order, with 7% opposed and 10% without an opinion.
Reactions
Acting Attorney General Todd Blanche stated: "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."
Sam Brill, CEO of Ascend Wellness Holdings, called the reclassification "an important step" toward a more transparent market.
Kevin Sabet, president of Smart Approaches to Marijuana, criticized the order, stating that marijuana is "more dangerous than previously thought" and that rescheduling sends a confusing message. He added that the order provides "a tax break to Big Weed."
A group of 22 Republican senators sent an open letter to the president expressing concerns that such a move could normalize cannabis use and hinder efforts to "re-industrialise America." They cited research linking cannabis to "impaired judgement" and "lack of concentration." In August 2025, nine Republican representatives wrote to Attorney General Pam Bondi, asserting a lack of adequate scientific data to support the change.
Roger Stone, a Republican operative, told Marijuana Moment it was "vitally important" to get marijuana reclassified before the midterm elections due to its appeal to young and libertarian voters. He accused someone in the administration of "holding up" the process.