** 4/23/26 - Crains - U.S. reclassifies medical marijuana as a less dangerous drug. Here’s what to know..................
Buzz Sawyer
Thursday, April 23, 2026
U.S. reclassifies medical marijuana as a less dangerous drug.
Here’s what to know.
The federal government has deemed marijuana as a less dangerous drug — sort of.
U.S. Attorney Todd Blanche signed an order Thursday rescheduling state-regulated medical marijuana on par with ketamine and Tylenol with codeine.
The process of rescheduling adult-use marijuana, which began under former President Joe Biden in 2022, remains in limbo.
But Blanche, in his Thursday order, directed the administrative review process to resume on June 29. The administrative review had been stalled since early last year after a judge deemed the U.S. Drug Enforcement Agency showed bias and impropriety in the process.
The state-regulated industry has long held hope that the government would reschedule marijuana to free up financial and tax benefits.
Blanche wrote: “Today the vast majority of States maintain comprehensive licensing frameworks governing cultivation, processing, distribution, and dispensing of marijuana for medical purposes. Taken as a whole, they demonstrate a sustained capacity to achieve the public-interest objectives ... including protecting public health and safety and preventing the diversion of controlled substances into illicit channels.”
But under the current order, those benefits will be extremely limited.
What is rescheduling?
Marijuana became a Schedule I drug following the passing of the Controlled Substances Act in 1970. The law established a legal framework for regulating, manufacturing, distributing, and possessing what it defined as dangerous drugs in the U.S. Schedule I drugs are defined as having a high potential for abuse and with no accepted medical use. That list included not only marijuana, but heroin, LSD and others.
The long-planned rescheduling would move marijuana to Schedule III, which is defined as a drug with lower abuse potential with accepted medical uses. This category includes ketamine, steroids, testosterone, etc.
What does rescheduling do?
Well, it depends on where you sit. While classifying it as Schedule III doesn’t make marijuana federally legal, it would open the door to research grants, potential banking opportunities for cannabis businesses and their employees.
How does rescheduling affect the legal weed industry?
For state-legal cannabis companies, the biggest and most obvious impact of the policy shift will be the nullification of 280E, a tax provision from the 1970s that prohibits those who traffic in Schedule I or Schedule II drugs from claiming standard business tax deductions.
That effectively means that marijuana businesses licensed by their home states pay a tax rate to the Internal Revenue Service of 70% or more, compared to the standard corporate tax rate of 21%.
However, under Blanche’s order, only medical marijuana operators will be able to write off business expenses.
Medical marijuana, of course, is the exact same product as adult-use recreational marijuana. The only difference is in the rules dictated by state regulators.
The tax benefits would be but a pittance of expenses across the total marijuana retail sector.
It’s also unclear whether this limited rescheduling would impact rules associated with banking — national banks still operate as though marijuana sales are an illegal transaction. The industry has effectively been locked out of banking with large national banks.
It’s not known whether banks will loosen rules or whether this limited rescheduling could grease Congress to pass new banking laws.
Looser banking rules would mean marijuana retailers would be able to start accepting credit card payments — it’s been a cash-only business since legal sales began.
Lower-interest loans may also become available. The industry has contended with high-interest loans due to existing in an industry still deemed federally illegal.
How long before full rescheduling actually occurs?
That’s difficult to tell.
Blanche’s order could be immediately challenged in court by questioning the evidence of marijuana having medical benefits.
The overall rescheduling has also been a contentious, at best, process. Normally, the U.S. Drug Enforcement Agency issues the final rule on rescheduling after a lengthy set of hearings in front of an administrative law judge.
The AG’s order is atypical in the process and seeks to end the DEA’s long-held apprehension of changing marijuana’s schedule.
It’s complicated, but dozens of nations signed on to the Single Convention of Narcotic Drugs treaty in 1961, including the U.S. The treaty mandates that all drugs defined under the treaty, including cannabis, be strictly controlled by the participating governments under Schedule I or II. The DEA has cited the treaty as an impassable hurdle in previous rulemaking.
But Uruguay and Canada have allowed marijuana sales and consumption nationally and have not been formally challenged by other treaty members. It’s unknown whether those treaty members would challenge the U.S. if it decided to reschedule.
And given the original hearing to reschedule has been four years in the making, it’s unknown how quickly this new process will move, even with the full-throated support of the AG.
Dustin Walsh writes for Crain’s sister publication Crain’s Detroit Business.