Trump administration eases marijuana restrictions, begins federal rescheduling process

A Republican administration moved to loosen federal marijuana restrictions on Wednesday, putting certain marijuana products into Schedule III and reopening a process that could shift the drug’s standing under federal law for the first time in decades. The change stops well short of legalization, but it puts banking, taxes, medical research and federal enforcement back at the center of a policy fight that has long run ahead of Washington.

Acting Attorney General Todd Blanche issued a final order placing FDA-approved drug products containing marijuana and medicinal marijuana products covered by a qualifying state-issued license in Schedule III under the Controlled Substances Act. The Justice Department said the action also begins an expedited administrative hearing process to consider broader rescheduling of marijuana from Schedule I to Schedule III, with the next Drug Enforcement Administration hearing set to begin June 29, 2026.

The department said the move is designed to strengthen medical research while maintaining strict federal controls. It also said the action was taken under its authority to reschedule drugs and to help carry out the United States’ obligations under the Single Convention on Narcotic Drugs. Even with the new order, federal criminal penalties for simple possession or trafficking remain unchanged, leaving a major gap between the policy shift and full legalization.

The stakes are large because marijuana has been listed as a Schedule I controlled substance since Congress enacted the Controlled Substances Act in 1970. State law has raced ahead of federal law: as of March 1, 2026, 24 states, the District of Columbia, Guam and the Northern Mariana Islands had enacted laws allowing recreational marijuana use, while many more states permit medical use. That patchwork has fueled a multibillion-dollar legal market and left consumers and operators navigating conflicting state and federal rules.

Rescheduling could ease one of the industry’s biggest financial burdens. Federal tax guidance says marijuana businesses remain subject to Internal Revenue Code section 280E while marijuana stays in Schedule I, preventing those firms from taking ordinary business deductions. Moving marijuana to Schedule III could remove that restriction for affected businesses, while also making it easier to secure financing and expand research into safety and effectiveness.

The new order revives a process that had already moved through several stages under President Joseph R. Biden. In October 2022, Biden directed HHS and the Justice Department to review marijuana’s scheduling. HHS recommended Schedule III in August 2023, with support from the Food and Drug Administration and the National Institute on Drug Abuse. The Justice Department formally proposed the move in May 2024, and the DEA later set hearings before the effort stalled. The Trump administration has now put that pipeline back in motion, with consequences that could reach patients, researchers, investors and state-regulated operators long before any broader legal settlement arrives.