Todd Blanche signs marijuana rescheduling order moving state-licensed cannabis to Schedule III
Acting Attorney General Todd Blanche signed an order Thursday reclassifying FDA-approved and state-licensed medical marijuana from Schedule I to Schedule III of the Controlled Substances Act, the Justice Department announced. The marijuana rescheduling Schedule III action is narrower than a full federal reclassification — it applies specifically to FDA-approved cannabis products and marijuana regulated under qualifying state medical licenses — but it is the first concrete enforcement-level move following President Donald Trump's December 2025 directive to speed up the process.
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Schedule I, the federal government's most restrictive tier, is reserved for drugs deemed to have no accepted medical use and a high potential for abuse (it currently includes heroin and LSD). Schedule III covers substances with moderate abuse potential and accepted medical applications, such as ketamine, anabolic steroids, and Tylenol with codeine.
"The Department of Justice is delivering on President Trump's promise to expand Americans' access to medical treatment options," Blanche said in a statement. "This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information."
Blanche noted that the order does not yet apply to marijuana generally, but initiates "a new, expedited hearing with set deadlines, to fully reschedule marijuana." The DOJ said the order sidesteps the stalled administrative process that bogged down under the Biden administration by relying on a provision of federal law that lets the attorney general classify drugs the U.S. must regulate under international treaty.
Cannabis equities rallied on the reports earlier this week. The AdvisorShares Pure US Cannabis ETF (MSOS), the benchmark vehicle for U.S. multi-state operators, climbed from $4.28 at Tuesday's close to roughly $5.24 on Wednesday — a 22% session gain, according to Investing.com pricing data.
Trump's cannabis executive order set the Schedule III path in December 2025
The action traces back to Executive Order 14370, "Increasing Medical Marijuana and Cannabidiol Research," which Trump signed on December 18, 2025. That order directed the attorney general to "take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the CSA in the most expeditious manner."
Speaking in the Oval Office before signing the December order, Trump called the move "common sense" and said, "The facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered. In some cases, this may include the use as a substitute for addictive and potentially lethal opioid painkillers," per CNN. He added: "I promised to be the president of common sense. That's exactly what I am doing."
Four months on, Trump publicly accused administration officials of "slow-walking" the cannabis executive order while signing a separate directive last Saturday that eased federal restrictions on psychedelic therapies including psilocybin, MDMA, and ibogaine. Blanche's Thursday order appears designed to answer that frustration.
Under Biden, the Justice Department formally recommended the same Schedule III reclassification in 2024, but the rulemaking stalled. An administrative law judge postponed the DEA hearing in January 2025 pending an interlocutory appeal, and presiding Judge John Mulrooney retired in August 2025, leaving the DEA without a sitting administrative law judge to hear the matter.
What the state-licensed medical marijuana order actually changes
The most material near-term impact is for publicly traded cannabis operators. Schedule III status would lift the burden of IRS Section 280E — a tax-code provision that bars businesses "trafficking" in Schedule I or II substances from deducting ordinary operating expenses. Some multi-state operators have reported effective federal tax rates of 70% or more under the rule. Removing it would materially improve operating margins for the companies tracked by MSOS.
Rescheduling also eases federal research barriers. Schedule I classification has long been cited by academic researchers as the single biggest obstacle to running clinical trials on cannabinoids like THC and CBD, because institutions need DEA-registered facilities and special licensing to handle the plant.
Still, the order stops well short of federal decriminalization:
State-legal recreational markets remain federally illegal, and interstate commerce remains barred.
Nasdaq and NYSE listing restrictions on plant-touching U.S. operators are not expected to change.
The order does not affect people incarcerated on federal marijuana charges.
Section 280E relief for recreational operators depends on how the final rule treats non-FDA-approved products — an open legal question.
Prohibitionist group Smart Approaches to Marijuana, which has retained former Attorney General Bill Barr, has signaled it will challenge any final rule in court.
Public opinion has also softened from the Biden-era peak. A recent Economist/YouGov poll conducted April 10–13, 2026 found 53% of adults support legalizing marijuana use, down from 60% in an April 2024 YouGov survey taken just before the Biden administration announced its rescheduling plan.
