Trump administration poised to downgrade federal marijuana restrictions

• President Trump is expected to order a federal reclassification of marijuana from Schedule I to Schedule III.
• The shift would ease research restrictions and reduce financial burdens on the legal cannabis industry.
• The move follows years of advocacy and a stalled review process initiated under the previous administration.
• Marijuana stocks surged dramatically on the news, reflecting major market implications.
• Reclassification would not equate to federal legalization but would mark the most significant federal cannabis policy change in over 50 years.

In a move with profound implications for public health, criminal justice and a multi-billion dollar industry, the Trump administration is preparing to dramatically alter the federal government’s stance on cannabis. President Donald Trump is expected to issue an executive order directing agencies to begin the process of reclassifying marijuana from a Schedule I to a Schedule III controlled substance. This technical change, discussed in a recent Oval Office call with advisors and industry executives, would end 55 years of the plant being officially categorized alongside heroin as a dangerous drug with no medical value, instead treating it more like certain prescription painkillers. While not legalizing cannabis federally, the shift promises to unlock medical research, ease financial burdens on state-legal businesses, and signal a historic retreat from the long-standing tenets of the war on drugs.

The weight of Schedule I

To understand the significance of this potential change, one must revisit the Controlled Substances Act of 1970. This law established the drug scheduling system, with Schedule I reserved for substances deemed to have a high potential for abuse and no accepted medical use. Marijuana’s placement in this category has created a scientific and regulatory paradox. Lawmakers have often cited a lack of rigorous research as a reason to maintain prohibition, but the Schedule I status itself has erected nearly insurmountable barriers to that research. Academic and medical institutions face a daunting process involving multiple agency approvals, stringent security protocols for storage, and exhaustive tracking of minuscule quantities. This has stifled the very clinical studies needed to fully understand cannabis’s therapeutic potential and risks.

Medical use and the end of Catch-22

Advocates for medical cannabis have long argued that the plant provides critical relief for numerous conditions, and major health organizations acknowledge its role. The American Cancer Society notes it can improve quality of life for patients by reducing treatment-related nausea, vomiting and severe pain. Beyond oncology, cannabis is used to address symptoms associated with conditions such as:

• Post-traumatic stress disorder (PTSD)
• Parkinson’s disease
• Epilepsy and seizure disorders
• Chronic pain and fibromyalgia
• Inflammatory bowel diseases

Reclassification to Schedule III would dismantle the research Catch-22, facilitating the large-scale, standardized studies required to integrate cannabis more formally into medical practice and validate patient experiences with clinical data.

Market euphoria and industry impact

The financial markets reacted instantaneously to the news, with cannabis company stocks soaring. Tilray Brands and Canopy Growth saw gains exceeding 30%, while the AdvisorShares Pure US Cannabis ETF rocketed more than 38% in after-hours trading. This volatility underscores the policy’s massive economic stakes. For the legal cannabis industry, operating in a patchwork of state-legal markets but federally illicit, Schedule III status would be transformative. It would lift the burdens of Internal Revenue Service code 280E, which currently prohibits state-legal cannabis businesses from deducting standard business expenses, crippling profitability. Furthermore, it would pave the way for greater access to banking and financial services, attracting more mainstream investment and stabilizing a sector that has struggled under federal prohibition.

A long road, with a political twist

The path to this moment has been protracted. The Biden administration’s Department of Justice recommended rescheduling to Schedule III in 2024, triggering a formal review by the Drug Enforcement Administration. However, the process stalled amid legal challenges and administrative delays, leaving the industry in limbo. The Trump administration’s move, therefore, would accelerate a bureaucratic process already in motion but frozen in place. The involvement of figures like Health and Human Services Secretary Robert F. Kennedy Jr., who has supported decriminalization, and the reported debate with House Speaker Mike Johnson, who voiced skepticism, highlights the unusual political coalition driving the issue. It reflects a rare consensus evolving across the American electorate, where polls consistently show majority support for legalization, putting pressure on politicians from both parties to reform outdated laws.

A new chapter for cannabis

The expected executive order would not immediately legalize marijuana nationwide but would initiate a formal federal rulemaking process to enact the reclassification. This represents the most significant proposed change to federal cannabis policy since the plant was first categorized as Schedule I. While debates will continue over regulation, potency and public health messaging, the move fundamentally acknowledges that the current federal stance is incompatible with both scientific inquiry and the legal realities in most states. By initiating the shift to Schedule III, the administration is poised to open the door to a new era of research, economic growth and a more coherent national approach to a substance that millions of Americans already use.

Sources for this article include:

ZeroHedge.com

Bloomberg.com

WashingtonPost.com