The U.S. government is poised to ease decades‑old federal restrictions on marijuana, with the Drug Enforcement Administration (DEA) expected to finalize a rule that would move cannabis from the government’s most restrictive category, Schedule I, to the less‑severe Schedule III under the Controlled Substances Act. The shift, ordered accelerated by President Donald Trump in a December 2025 executive order, would not legalize recreational cannabis nationwide, but it would mark the most significant federal policy change on marijuana in more than half a century.
How we got here
Under federal law, marijuana has been classified since 1970 as a Schedule I drug, a category reserved for substances the government says have “no currently accepted medical use” and a high potential for abuse, alongside heroin and LSD. That status has long been at odds with state‑level legalization and medical programs, and it sharply limited research.
The current shift traces back to several steps:
- In October 2022, President Joe Biden asked the Department of Health and Human Services (HHS) and the DEA to review marijuana’s scheduling.
- In August 2023, HHS recommended moving cannabis from Schedule I to Schedule III, concluding that it has accepted medical uses and a lower abuse risk than Schedule II drugs like oxycodone.
- In May 2024, the Department of Justice and DEA issued a proposed rule to reschedule marijuana to Schedule III, triggering a formal rulemaking process and drawing nearly 43,000 public comments.
- In December 2025, President Trump signed the “Increasing Medical Marijuana and Cannabidiol Research” executive order, directing the attorney general and DOJ to “take all necessary steps” to complete the rescheduling “in the most expeditious manner.”
That order did not itself change marijuana’s legal status, but it politically locked in the administration’s commitment to moving cannabis to Schedule III. As of early 2026, experts say the DEA is nearing the point when it must issue a final rule confirming the reclassification or explain why it is diverging from HHS’s scientific recommendation — something it rarely does.
What “Schedule III” actually means
Under the Controlled Substances Act, Schedule III drugs are those with accepted medical uses and a moderate to low potential for physical or psychological dependence, such as Tylenol with codeine and testosterone.
If marijuana is moved to Schedule III:
- It would no longer be labeled as having “no medical use.”
- It would still be a controlled substance, subject to DEA oversight, prescription‑like controls, and manufacturing regulations.
- Researchers could more easily obtain federal approval and product to study cannabis for pain, nausea, and other conditions.
Policy analysts emphasize that rescheduling is a classification change, not a blanket legalization of cannabis. As one fact sheet puts it: “Rescheduling = classification change. Legalization = legality change.”
That means state criminal laws and bans on recreational use remain intact, and federal law would still prohibit unlicensed production and distribution outside the CSA framework.
What changes for research and medicine
One of the clearest impacts of rescheduling would be on medical research.
For decades, Schedule I status imposed extra layers of DEA registration, security, and product‑handling requirements, slowing or blocking studies on cannabis’ potential to treat pain, chemotherapy‑induced nausea, multiple sclerosis spasticity and other conditions.
HHS’s scientific review, which underpins the rescheduling, already concluded there is “credible scientific support” for marijuana’s medical use in treating pain, anorexia related to certain illnesses and chemotherapy‑induced nausea and vomiting, a finding the National Institute on Drug Abuse endorsed.
Once cannabis is in Schedule III:
- Universities and hospitals could more easily conduct clinical trials using standardized products.
- Pharmaceutical companies might pursue FDA‑approved cannabis‑based medications, beyond the synthetic or purified THC products already on the market.
- Data could better inform dosage, safety, and efficacy guidelines, narrowing the gap between state medical programs and federal evidence standards.
Advocates argue this will help move cannabis policy from anecdote to evidence. Critics worry that pharmaceutical‑only pathways could marginalize existing state medical programs if not carefully coordinated.
What changes for the cannabis industry
For state‑licensed cannabis companies, the biggest near‑term impact is expected to be federal tax relief rather than a full legal blessing.
Under current law, Internal Revenue Code section 280E bars businesses trafficking in Schedule I or II substances from deducting ordinary business expenses, leaving many cannabis firms with cripplingly high effective tax rates.
If marijuana moves to Schedule III:
- 280E would no longer apply to compliant cannabis businesses, allowing them to deduct payroll, rent and other costs like any other enterprise.
- That could improve profitability and investment in legal markets, especially those already struggling with slim margins and competition from illicit sellers.
However, rescheduling does not automatically legalize interstate cannabis commerce or erase the conflict between federal law and state‑licensed operations. Banks and exchanges may remain cautious until Congress enacts broader protections, such as SAFE‑style banking reforms or federal legalization.
The Trump executive order also signaled interest in full‑spectrum CBD products, urging agencies to ensure patients retain access even as Congress tightens hemp rules, an issue that intersects with the broader cannabis industry.
What does not change
Experts stress several important limits to what rescheduling would do.
If the DEA finalizes marijuana as Schedule III:
- Recreational cannabis remains illegal under federal law. State legal programs (for adult use or medical) are still running in tension with the CSA; DOJ prosecutorial discretion and congressional budget riders will continue to shape enforcement.
- State criminal penalties stay on the books unless state legislatures change them. Someone caught with cannabis in a prohibition state can still face arrest and prosecution under state law.
- Workplace drug testing rules, particularly in DOT‑regulated industries like trucking and aviation, are not automatically altered by rescheduling; agencies must update their own regulations if they choose.
- People with past federal marijuana convictions do not automatically see their records cleared, that would require separate expungement or clemency policies from the president or Congress.
In short, rescheduling narrows the gap between federal policy and the reality of widespread state‑level legalization, but it does not close it.
What happens next in Washington
Legally, the rescheduling process follows a formal rulemaking path: DEA publishes a proposed rule, takes public comments, holds hearings if requested, and then issues a final rule in the Federal Register. As of early 2026, the proposed rule has been issued and commented on, and an administrative hearing has been postponed once while an appeal by an involved party is resolved.
Trump’s December 2025 executive order told the DOJ to expedite completion of the process, but it cannot legally skip required steps. Analysts at Ohio State University’s Drug Enforcement and Policy Center say the government is now in the final stages where DEA must decide whether to adopt HHS’s recommendation and move cannabis to Schedule III or face legal and political blowback for ignoring it.
Congress could still intervene, either by passing comprehensive legalization or de‑scheduling legislation, or by adjusting the CSA to treat cannabis differently. But in the near term, most observers expect the administrative route, rescheduling to Schedule III, to happen first, changing the landscape for research and tax policy even as broader legalization debates continue.
For Americans, the headline may sound like the end of Prohibition. The reality is more technical but still historic: after more than 50 years, the federal government is on the verge of officially acknowledging that marijuana has medical value and is less risky than the law has long claimed, while leaving the bigger question of full legalization for another political fight.
