Marijuana Policy Reset: Inside Trump’s Reclassification Order — What The New Status Means For Users

In a major shift in US drug policy in decades, President Donald Trump signed an executive order on Thursday, Dec. 18, to reclassify marijuana as a less dangerous drug. 

The decision has sharply divided Washington, Reuters reported. Senate Democratic leader Chuck Schumer welcomed the order, while resistance came from within Trump’s own Republican Party. 

Many Republican lawmakers in the US House of Representatives and Senate wrote to the President urging him not to proceed, the report added. 

“Reclassifying marijuana as a Schedule III drug will send the wrong message to America’s children, enable drug cartels, and make our roads more dangerous,” they were quoted as saying.

Trump’s order instructs the attorney general to move toward reclassifying marijuana under federal law. If implemented, cannabis would be moved out of Schedule I classification, which is the most restrictive category under the Controlled Substances Act, alongside heroin and LSD. It would be listed as a Schedule III substance, placing it alongside drugs such as ketamine, testosterone and commonly prescribed painkillers that are considered less dangerous than those in the most restrictive category, CNBC reported.

Trump said that the move does not legalise marijuana at the federal level. Cannabis would continue to be illegal nationwide and governed by a patchwork of state and local laws. He told reporters at the White House, “We have people begging for me to do this, people that are in great pain for decades.”

At the same time, Trump reiterated his own opposition to using controlled substances, according to Reuters. “I don't want it, okay,” he said. “I'm not gonna be taking it. But a lot of people do want it. A lot of people need it.”

Senior administration officials said the primary aim of the order is to expand medical research into marijuana and related products, particularly to better understand their risks and therapeutic potential.

In a related development, the Centres for Medicare and Medicaid Services plans to allow some beneficiaries to use hemp-derived CBD products as early as April, signalling a broader shift in how cannabis-related treatments may be approached within the federal healthcare system.

According to CNBC, many analysts see the reclassification as a financial lifeline for the cannabis sector. The change would exempt companies from IRS Code Section 280E, enabling them to deduct ordinary business expenses like rent and payroll for the first time. IRS Section 280 is a U.S. tax rule that prevents cannabis companies from claiming normal business tax deductions. It would also ease access to banking services and institutional capital that has largely stayed away due to regulatory concerns.

Many on Wall Street reportedly expect that the regulatory shift, combined with the Medicare pilot programme, could attract major pharmaceutical companies into the space as they pursue federally insured revenue streams.