The Cannabis Rescheduling Shift: A Partial Victory in America's Long Drug Policy Journey

Executive Action and Historical Context

In a move signaling significant federal policy evolution, President Donald Trump signed an executive order on Thursday downgrading cannabis from Schedule I to Schedule III under the Controlled Substances Act. This administrative action, while maintaining federal prohibition, acknowledges what scientific evidence and public opinion have demonstrated for decades: cannabis possesses legitimate medicinal value and does not belong in the same category as heroin and other dangerous narcotics. The reclassification represents the most substantial federal cannabis policy shift in generations, though it falls short of the full legalization advocates have demanded.

The executive order specifically moves marijuana from Schedule I—reserved for substances with “no currently accepted medical use and a high potential for abuse”—to Schedule III, which includes drugs like ketamine and testosterone that have accepted medical applications and lower abuse potential. Crucially, the order does not legalize marijuana federally or change enforcement priorities, meaning the fundamental contradiction between state legalization movements and federal prohibition persists. However, the policy change unlocks critical research opportunities and provides meaningful financial relief to state-licensed cannabis businesses operating legally under state laws but burdened by punitive federal tax code provisions.

This development comes amid a broader bipartisan recognition that America’s drug classification system requires modernization. The Trump administration’s action follows initial steps taken by the Biden administration in 2022, when President Biden directed the Department of Health and Human Services and Drug Enforcement Administration to review marijuana’s scheduling. The HHS subsequently recommended Schedule III classification based on scientific evaluation, though the DEA’s rule-making process has stalled. The convergence of both Republican and Democratic administrations toward rescheduling indicates a fundamental shift in how federal institutions approach cannabis policy, moving from radical prohibition toward cautious acceptance of medical applications.

The Economic and Business Implications

The most immediate practical impact of rescheduling concerns the cannabis industry’s financial landscape. Under current tax code Section 280E, businesses trafficking in Schedule I or II substances cannot deduct ordinary business expenses like rent, payroll, or marketing. This provision has forced state-legal cannabis operations to pay effective tax rates exceeding 70% in some cases, crippling profitability and deterring legitimate investment. Rescheduling to Schedule III removes this punitive tax burden, potentially transforming the economic viability of thousands of businesses operating in the 38 states that have legalized medical or recreational cannabis.

John Kagia, policy director of New York’s Office of Cannabis Management, highlighted how this change could unleash economic potential in states like New York, where regulators have awarded licenses to nearly 2,100 cannabis businesses. “It means higher profitability for businesses who are having to set aside huge amounts of money to meet their federal tax obligations,” Kagia noted, emphasizing how rescheduling could make the industry more attractive to risk-averse investors. This economic normalization represents more than just financial relief—it signals the gradual integration of cannabis into mainstream commerce, reducing the stigma that has plagued the plant since its initial classification in 1970.

The Medicare pilot program for CBD treatments announced alongside rescheduling further demonstrates how policy change can create tangible benefits for patients. Howard Kessler, a billionaire financier and Trump ally who advocated for the Medicare proposal, called it “one of the boldest breakthroughs in generations” that would bring “immediate, life-altering relief” to seniors suffering from chronic conditions. While the rescheduling itself dominates headlines, these practical applications demonstrate how policy modernization can directly improve American lives.

The Unfinished Work of Justice

Despite these positive developments, the rescheduling represents what Martin Luther King Jr. might have called the “tranquilizing drug of gradualism” in drug policy reform. The most glaring injustice—the tens of thousands of Americans incarcerated for non-violent cannabis offenses—remains unaddressed. Jason Ortiz of the Last Prisoner Project rightly noted that President Trump could “cement his legacy as the leader who has done more for cannabis justice than any other president in American history” by granting clemency to those still imprisoned for actions that are now legal in most states.

This contradiction exposes the fundamental hypocrisy of incremental reform: we acknowledge cannabis has medical value and deserves economic normalization while leaving victims of prohibition to languish in prisons. The moral imperative demands not just policy adjustment but restorative justice. Every day that passes without clemency represents a continued violation of basic human dignity and a betrayal of American principles of fairness and redemption.

The opposition from 18 Republican senators and 26 House Republicans highlights how far we still must travel toward evidence-based drug policy. Their letter claiming that facilitating marijuana growth “is at odds with growing our economy and encouraging healthy lifestyles” demonstrates either willful ignorance or deliberate distortion of reality. States with legal cannabis have experienced economic booms, created hundreds of thousands of jobs, and generated billions in tax revenue while seeing no corresponding increase in abuse or social disorder. This opposition represents the last gasp of prohibitionist ideology that has devastated communities, particularly communities of color, for generations.

Scientific Integrity and Research Freedom

Dr. Kevin Hill of Harvard Medical School correctly noted that rescheduling “will make cannabis research easier by removing some key hurdles,” but emphasized that funding limitations remain the primary barrier. For decades, Schedule I classification created a catch-22: researchers couldn’t study cannabis because it was considered dangerous, and it remained considered dangerous because researchers couldn’t study it. This circular logic prevented scientific inquiry and perpetuated misinformation.

The rescheduling breakthrough should compel states and companies benefiting from cannabis sales to contribute significantly to research efforts. The federal government has a responsibility to ensure robust, independent research into cannabis’s medical applications, dosage protocols, and potential risks. Only through comprehensive scientific understanding can we develop evidence-based policies that maximize benefits while minimizing harms.

The Constitutional and Federalism Dimension

The ongoing tension between state legalization and federal prohibition raises fundamental questions about federalism and individual liberty. The Tenth Amendment reserves powers not delegated to the federal government to the states, yet federal drug laws have consistently overridden state decisions regarding cannabis. This federal overreach has created a patchwork of contradictory laws that confuse citizens, burden businesses, and undermine respect for the rule of law.

True constitutional consistency requires either federal legalization that respects state variation or a clear federalist approach that defers to state decisions. The current halfway measures—where states legalize while federal prohibition technically remains—create legal uncertainty and perpetuate injustice. As a nation founded on principles of limited government and individual autonomy, we must reconcile our drug laws with our founding values.

The Path Forward

While President Trump’s executive order represents meaningful progress, it falls short of the comprehensive reform needed. True victory requires several additional steps: First, immediate clemency for all non-violent cannabis offenders. Second, full descheduling or legalization that respects state autonomy while removing federal barriers. Third, robust investment in research to fully understand cannabis’s medical potential. Fourth, restorative justice programs that address the disproportionate impact of prohibition on minority communities.

The bipartisan nature of this policy shift offers hope that comprehensive reform may finally be within reach. When both major political parties recognize the failure of prohibition, when scientific evidence overwhelms outdated dogma, and when public opinion demands change, transformational progress becomes possible. This moment represents not an endpoint but a turning point in America’s relationship with cannabis—one that must lead toward greater freedom, greater justice, and greater respect for individual autonomy.

As we celebrate this incremental victory, we must remember those still suffering under prohibition’s shadow. Our work remains incomplete until every victim of the drug war has been freed, until every patient can access needed medicine without stigma, and until our laws reflect both scientific reality and our nation’s founding commitment to life, liberty, and the pursuit of happiness. The arc of moral universe bends toward justice, but only when we have the courage to pull it in that direction.