President Donald Trump and his administration shifted cannabis from Schedule I to Schedule III, this week, making for a historic change in the United States’ cannabis policy. That would not federally legalize adult-use weed, but it would be a huge policy change for research, taxation, and capital access. It also lit the market up immediately, with cannabis stocks jumping hard on the reports.
The move became official on April 23, 2026, the Department of Justice (DOJ) officially announced the reclassification of certain marijuana products from Schedule I to Schedule III of the Controlled Substances Act. This action, signed by Acting Attorney General Todd Blanche, follows through on a December 18, 2025, Executive Order from President Trump.
Major Impacts of Schedule III Status
- Elimination of Section 280E Tax Burden: For state-licensed medical operators, moving to Schedule III removes the punitive Section 280E of the tax code. This allows businesses to finally deduct standard operating expenses like rent, payroll, and marketing, potentially lowering effective federal tax rates from as high as 70% to standard corporate rates.
- Enhanced Research: The reclassification significantly lowers federal barriers to medical research, allowing for more rigorous studies into the safety and efficacy of marijuana.
- Banking and Investment: While not a full resolution to banking issues, the removal of the 280E tax burden improves the financial stability and creditworthiness of cannabis businesses, potentially making it easier for them to secure funding and build partnerships with financial institutions.
- Immediate Rescheduling: Effective immediately, the DOJ has placed all FDA-approved marijuana products and marijuana products regulated by a state-issued medical license into Schedule III.
- Expedited Hearing for Broader Changes: The DOJ also initiated an expedited administrative hearing process, set to begin on June 29, 2026, to evaluate the broader rescheduling of all marijuana from Schedule I to Schedule III.
- Acknowledgment of Medical Use: This shift officially recognizes the medical benefits of marijuana and the longstanding regulation of medical programs by state governments.
- Market Impact: Following the announcement, shares of major cannabis companies such as Canopy Growth, Tilray Brands, and Trulieve jumped between 6% and 13%
What Today’s Action Does Not Do
- No Federal Legalization: Rescheduling is an administrative action and does not federally legalize marijuana.
- Recreational Marijuana Status: Non-medical (adult-use) marijuana products currently remain in Schedule I, pending the outcome of the new hearing process starting in June.
- No Retroactive Relief: The tax benefits and legal shifts are expected to apply prospectively; there is currently no proposal for retroactive 280E tax relief for prior years.
- Criminal Justice: The move does not automatically affect the sentences of individuals currently incarcerated for marijuana-related offenses.
Schedule III would be the closest thing the industry has had to a federal exhale in years. Reuters notes it could make research easier and reduce tax burdens, especially the pain around federal tax treatment that has hammered legal operators.
But this is the key newsroom caution: reported imminent movement is not the same thing as final, finished law. The DEA or DOJ still has to actually do it.
So the angle is not “weed wins forever,” it’s “Washington may finally be passing the lighter!!!
