Federal Government Reclassifies Medical Marijuana as Less Dangerous Drug

A drop of water glows on the magenta hairs of a marijuana plant. [Photo by Kym Kemp]

According to reporting by the Associated Press, Acting Attorney General Todd Blanche signed an order Thursday reclassifying state-licensed medical marijuana from Schedule I to Schedule III under the federal Controlled Substances Act.

Schedule I drugs are defined as having no accepted medical use and a high potential for abuse. By contrast, Schedule III drugs are considered to have recognized medical uses and a lower risk profile.

The change does not legalize marijuana under federal law, either for medical or recreational use. But it does alter how the drug is regulated and researched, and could have wide-reaching impacts on the cannabis industry.

The reclassification is limited in scope, applying to state-licensed medical marijuana and certain FDA-approved cannabis products, rather than all marijuana nationwide.

Moving marijuana to Schedule III is expected to ease restrictions in several key areas.

• Under current law, cannabis businesses operating legally under state law are barred from taking standard federal tax deductions. The shift could allow those businesses to claim those deductions, significantly reducing their tax burden.
• The new classification is also expected to make it easier for researchers to study marijuana, an area long constrained by federal rules tied to its Schedule I status.
• Financial access may also expand, as federal restrictions have historically discouraged banks and lenders from working with cannabis-related businesses.

However, this is not full legalization. Despite the change, marijuana remains illegal under federal law.

Federal authorities retain the ability to enforce marijuana laws, and the reclassification does not authorize interstate transport, recreational use, or changes to existing criminal penalties.

BUT, the administration also announced plans to move forward with a broader review of marijuana’s classification, including hearings expected to begin in June.

That broader process would determine whether marijuana as a whole should be permanently reclassified under federal law.

The move follows a December 2025 directive from President Donald Trump instructing federal agencies to reduce restrictions on marijuana and accelerate rescheduling efforts.

Advocates have long argued that marijuana’s placement alongside drugs like heroin was outdated, particularly as most U.S. states now allow some form of medical or recreational use.

Critics, however, have raised concerns about potential health risks and the speed of the policy change.