Justice Department reschedules medical marijuana, opening doors to banking and finance

Federal marijuana reclassification has moved cannabis medicine closer to the rules that govern other drug developers, but it has not erased the biggest question for investors: whether the sector can finally behave like financeable biotech rather than a regulatory outlier.

On April 23, the Justice Department placed FDA-approved marijuana products and marijuana products covered by qualifying state medical marijuana licenses in Schedule III, while setting a June 29, 2026 administrative hearing on whether marijuana should be broadly moved from Schedule I to Schedule III. The department tied the move to President Trump’s December 18, 2025 executive order on expanding medical marijuana and cannabidiol research, and said it was meant to strengthen medical research while keeping federal controls in place. Adult-use marijuana remains Schedule I.

The reclassification matters because Schedule I has long been reserved for substances with high abuse potential and no currently accepted medical use, according to the Congressional Research Service. Health and Human Services recommended moving marijuana to Schedule III on August 29, 2023, after an FDA review, which shows how long the policy shift has been building. For qualifying medical operators, Schedule III can reduce some of the tax burden that came from Section 280E and can make banking relationships easier, two changes that the industry has sought for years.

That is the part private investors care about most. Mainstream banks and institutional money have often stayed cautious around cannabis because of federal stigma, uneven rules and tax risk. Now some companies are already testing whether the new category can support the kind of financing biotech firms use for trials and drug development. Goodwin co-chair Brett Schuman said companies have heard directly from venture capital investors that rescheduling should help capital start flowing again.

Ananda Pharma is one early case. The company is developing a cannabis-based treatment for endometriosis-related pain and is preparing to raise between $10 million and $20 million in private funding within six months. Chief Executive Melissa Sturgess said the company already has calls lined up with a venture capital investor focused on endometriosis and with a U.S.-based family office. Its ENDOCAN Phase 2 trial, for MRX1, received MHRA and NHS Health Research Authority approval on March 4, 2026, and plans to randomize up to 100 women over 12 weeks through NHS Lothian and NHS Grampian in Scotland. Ananda says endometriosis affects about 190 million women globally and costs the UK about £8.2 billion annually, while U.S. costs top $100 billion.

IGC Pharma is pushing a similar argument on the Alzheimer’s side. The company said on September 22, 2025 that its Phase 2 CALMA trial for IGC-AD1 had reached 50% enrollment and was aiming to finish recruitment in calendar 2026. The multicenter, double-blind, placebo-controlled, randomized study is testing a low-dose THC liquid for agitation in Alzheimer’s disease, a symptom IGC says affects up to 76% of patients. The company has expanded trial sites across Florida, Ontario, Rhode Island, Oklahoma, British Columbia and Puerto Rico, and it has said it may raise about $50 million later this year.

The larger implication is clear: Schedule III makes medical cannabis look more like a drug-development category that can support research, banking and eventually public-market financing. But the bar for full mainstream capital remains high. Federal uncertainty is still alive, adult-use marijuana is still in Schedule I, illicit sellers still distort the market, and broader legalization would still require congressional action.