The Justice Department is poised to reclassify marijuana from Schedule I to Schedule III, fulfilling a 2023 FDA-backed assessment and an executive order from President Trump directing expedited action. The move, while not legalizing cannabis, would recognize medical research potential by easing study barriers and align with a long-running push that began under Biden in 2022. Schedule III carries a lower dependence risk and includes drugs like ketamine, potentially broadening research access. The change could also reduce cannabis companies’ tax burden, which currently faces a roughly 60% effective rate before deductions, though officials have not yet announced a formal timeline. The decision follows a path from DHHS study to administration-level action and signals a shift in regulatory framing rather than consumer legalization.
Dive Deeper:
The Department of Justice is expected to reclassify marijuana from Schedule I to Schedule III, moving it out of the most restrictive category that includes heroin and LSD, with officials citing a December executive order from President Trump as a driver for expedited action.
The Biden administration initiated the rescheduling consideration in 2022, directing the Department of Health and Human Services to assess whether marijuana should remain Schedule I, a study reported by the FDA in 2023 recommended the downgrade to Schedule III, and the Trump administration revisited that recommendation last year.
Schedule III is defined as having a moderate to low potential for dependence and includes drugs such as anabolic steroids, ketamine, and certain codeine-containing products, according to the DEA.
The move is framed as a pathway to expand medical research on marijuana by removing barriers associated with Schedule I classification, though it does not legalize cannabis for recreational use.
Officials have not publicly confirmed the timing of the rescheduling, and there was no immediate comment from the DOJ when contacted by Forbes.
A potential economic impact includes a reduction in the tax burden on cannabis companies, which currently pay an effective tax rate around 60% of gross revenue before deductions due to the Schedule I status.