President Donald Trump has issued an order to relax federal restrictions on marijuana.
The executive order, signed on Thursday, would move marijuana to a lower drug classification on par with some common prescription medications. This change won’t legalize the drug federally, but it will reduce obstacles for cannabis research and might support the cannabis industry.
On Monday, Trump had indicated he was considering reclassification following months of his administration examining the step.
“This reclassification order will make it far easier to conduct marijuana-related medical research, allowing us to study benefits, potential dangers and future treatments,” Trump said in the Oval Office on Thursday. “It’s going to have a tremendously positive impact.”
Here’s what the order means for the drug, its uses, and the cannabis industry.
What does the order do?
The order instructs Attorney General Pam Bondi to speed up the process of reclassifying marijuana from a Schedule I drug—the same category as heroin and LSD—to Schedule III.
The Drug Enforcement Administration (DEA) defines Schedule I drugs as having “no currently accepted medical use and a high potential for abuse.”
By contrast, Schedule III drugs are defined as having “a moderate to low potential for physical and psychological dependence.” For example, Tylenol with codeine is a Schedule III drug, along with other prescription medications like Valium, painkillers, appetite suppressants, and some steroid and hormone treatments.
Does the order legalize marijuana?
The order won’t legalize or decriminalize cannabis, which remains fully illegal under federal law.
Forty states and Washington, D.C., have legalized medical marijuana, while 24 states have legalized recreational use. But even though these uses are permitted in many states, they’re still federally illegal under the Controlled Substances Act, which requires manufacturers to get U.S. Food and Drug Administration approval for their products to be lawful.
The order won’t change this—companies will still need authorization to legally manufacture and distribute the drug.
Recreational marijuana use and penalties for drug-related crimes won’t be affected by the order.
How will the order affect cannabis research and businesses?
The order will reduce regulatory barriers for using cannabis in research, which is likely to boost efforts to study the drug and develop medical marijuana products.
Reclassification might also benefit legal cannabis businesses, as they could claim tax deductions for some operational costs. Cannabis companies would no longer be subject to Section 280E of the U.S. federal tax code, which bars businesses handling Schedule I and II controlled substances from deducting business expenses or claiming tax credits. Viridian Capital Advisors, a cannabis investment firm, estimates the move could mean roughly $800 million in annual savings for the top 12 U.S. cannabis companies.
The change could also facilitate progress on other measures to legalize and regulate the industry, given Trump’s stated support. Because cannabis is classified as a Schedule I controlled substance federally, many large banks and financial institutions have refused to offer full services to the industry over fears of federal penalties. While rescheduling alone won’t resolve these banking challenges, Trump’s backing could shift momentum toward legislation like the Secure and Fair Enforcement Regulation (SAFER) Banking Act—a 2023 bill that proposes a “safe harbor” for financial institutions to lend to cannabis firms operating legally in their states.
“Rescheduling is not the whole enchilada but it would be a big deal,” Beacon Policy Advisors analysts wrote in a research note this week. “The momentum these changes would bring would itself be an ‘important domino’ in advancing other reforms.”
Why does Trump want to reclassify marijuana?
During his 2024 presidential campaign, Trump became an outspoken supporter of relaxing federal marijuana restrictions as he sought to appeal to younger voters. In September last year, he said he planned to vote for a Florida ballot initiative to legalize recreational marijuana that November.
At the time, Trump posted on Truth Social that as president, he would “continue to focus on research to unlock the medical uses of marijuana to a Schedule III drug.” He has also expressed support for allowing state-legal cannabis companies to have bank accounts, empowering states to enact marijuana laws, and permitting universities to research marijuana.
“I believe it is time to end needless arrests and incarcerations of adults for small amounts of marijuana for personal use. We must also implement smart regulations, while providing access for adults, to safe, tested product,” Trump wrote.
Trump may once again be trying to gain favor with young adults with the 2026 midterm elections in view. According to a Harvard Institute of Politics survey published this month, the president’s support among 18- to 29-year-olds stands at just 29%, down slightly from 31% in a prior survey the institute conducted this spring.
What other efforts have been made to ease marijuana restrictions?
In October 2022, former President Joe Biden instructed the Department of Health and Human Services (HHS) and the DEA to review marijuana’s classification. In 2023, HHS recommended reclassifying marijuana as Schedule III, and the DEA started administrative reviews of the drug, with an administrative hearing on the proposal pending. The hearing stalled during the transition to the Trump administration, as cannabis companies alleged the DEA was intentionally blocking the measure.
The push to reclassify marijuana has faced pushback from some Republicans, including nine GOP lawmakers who sent a letter to Bondi earlier this year arguing that rescheduling the drug would “enable criminal activity and harm our kids.”