WASHINGTON DC (Business Emerge): The United States government has initiated a formal process to adjust how marijuana is treated under federal law, following an executive order signed this week that instructs the attorney general to advance a review of its current classification. The directive sets in motion steps that could place marijuana in a category defined as presenting lower risk compared to its existing status.
The executive order, signed in Washington on Wednesday, asks the Department of Justice to work through established procedures to reconsider marijuana’s position under the Controlled Substances Act. Senior officials confirmed that the process would involve coordination with health and enforcement agencies that oversee drug policy and compliance at the federal level.
Marijuana is presently listed as a Schedule I substance, a category reserved for drugs defined by statute as having high abuse potential and no accepted medical use. A proposed shift would move the drug to Schedule III, a classification that includes substances recognized for medical use and considered to have lower risks of dependency. Other drugs in this category include certain pain management treatments and hormone therapies.
If completed, the reclassification would represent the most significant adjustment to federal marijuana policy since the Controlled Substances Act was enacted in 1970. The change would not alter state-level rules directly, but it would modify how federal agencies regulate, tax, and supervise businesses that handle cannabis-related products.
Several publicly listed cannabis companies operate in markets that could be affected by the revised framework. Firms with cultivation, processing, or research operations in North America include Canopy Growth, Organigram Global, SNDL, Aurora Cannabis, Trulieve Cannabis, and Tilray Brands. These companies currently navigate federal constraints that influence taxation, access to capital, and research approvals.
One measurable consequence of a Schedule III designation would involve the federal tax code. Businesses dealing with Schedule I or Schedule II substances are subject to Section 280E, which restricts their ability to deduct standard operating expenses. Removal from these categories would allow cannabis companies to claim deductions available to most other regulated industries, directly affecting after-tax earnings.
Financial access also remains a central issue for the sector. Many banks and institutional lenders limit or avoid relationships with cannabis businesses due to federal restrictions. As a result, companies often rely on higher-cost financing or alternative funding structures. A change in classification would reduce compliance barriers for financial institutions providing services such as deposit accounts, insurance, and lending.
The regulatory review builds on earlier actions taken within the federal system. In the previous year, the Department of Health and Human Services completed a scientific and medical evaluation of marijuana and submitted a recommendation supporting a move to Schedule III. The Drug Enforcement Administration is required to assess that recommendation and determine whether to implement the change through rulemaking.
Clinical research has also been constrained by marijuana’s current status. Researchers developing cannabinoid-based treatments must meet additional approval requirements, which can delay or limit studies. Industry participants involved in pharmaceutical development have stated through filings and public disclosures that reduced restrictions would align cannabis research with processes applied to other regulated medicines.
Beyond the executive branch, legislative proposals addressing financial services for cannabis-related businesses remain under consideration. One measure introduced in Congress would clarify that state-authorized cannabis firms are eligible for standard banking and insurance services. While no changes to statute were announced alongside the executive order, the reclassification review proceeds independently of legislative action.
Next steps depend on the completion of regulatory evaluations and the issuance of any final rules by enforcement authorities. The attorney general’s office and the Drug Enforcement Administration must follow notice and review procedures before implementing a revised schedule. Until those steps are finalized, existing federal requirements remain in effect for cannabis companies operating in the United States.
