Trump Reclassified Marijuana to the Same Federal Tier as Tylenol With Codeine, The Change Just Took Effect.

For 55 years, cannabis sat in Schedule I under the 1970 Controlled Substances Act, grouped with heroin and LSD as having no accepted medical use and a high potential for abuse.

In 2023, the Department of Health and Human Services and the FDA concluded there was substantial evidence for marijuana’s medical use and recommended moving it to Schedule III. The National Institute on Drug Abuse agreed. In May 2024, the DEA issued a notice of proposed rulemaking to do exactly that. It drew nearly 43,000 public comments before stalling at an administrative law hearing.

On December 18, 2025, President Trump signed Executive Order 14370, “Increasing Medical Marijuana and Cannabidiol Research,” directing the Justice Department to complete the rescheduling “in the most expeditious manner” consistent with federal law. Acting Attorney General Todd Blanche, appointed after the departure of Pam Bondi, signed the administrative order this morning.

Two material changes take effect immediately.

IRS Section 280E had blocked cannabis businesses from deducting ordinary expenses like rent, payroll, and marketing because they sold a Schedule I substance. Effective federal tax rates ran north of 70 percent for many operators. Schedule III removes cannabis from the scope of 280E. Licensed businesses can now deduct the same expenses as any other industry, and analysts expect prices at state-licensed dispensaries to come down over time.

For decades, the only federally legal source of cannabis for research was a single farm at the University of Mississippi operating under contract with NIDA. Schedule III puts marijuana under the same framework as ketamine and certain anabolic steroids. Standard FDA clinical trials are now on the table, DEA oversight eases for qualified researchers, and additional licensed cultivators can produce research-grade material.

Recreational possession, cultivation, and sale remain illegal under federal law. The rescheduling doesn’t override state prohibitions or create a national recreational market.

Medical cannabis programs already operate in 38 states and the District of Columbia. Federal scheduling now sits closer to that reality than it has in half a century. Full legalization still requires an act of Congress.