Justice Department orders state licensed medical marijuana to be reclassified federally

The Trump administration has reclassified FDA-approved medical marijuana as a less dangerous drug, which could be a huge boost to Michigan’s medical marijuana industry by making banking easier.

Marijuana had been a a Schedule I drug, similar to heroin and ecstasy, and the announcement instructs the government to shift that classification to Schedule III, similar to ketamine, anabolic steroids, testosterone and Tylenol with codeine. 

The reclassification does not legalize marijuana federally, and does not affect recreational marijuana, but could allow for easier financial access for medical marijuana and could make scientific research easier.

It could allow businesses to deduct normal business expenses and allow easier access to banking, two of the biggest dampers on Michigan’s legal cannabis industry.

The announcement, in a Justice Department statement Thursday, also set a hearing for June 29 about reclassifying the drug in a broader way, which could set the stage for broader legalization.  

“This action recognizes the longstanding regulation of medical marijuana by state governments and the need for a common-sense approach to this reality,” the Justice Department said in a statement Thursday announcing the major shift.

The statement cites President Donald Trump’s Dec. 18, 2025, Executive Order on Increasing Medical Marijuana and Cannabidiol Research.

The 33-page order sets up a registration process so medical and scientific uses can have established processes, with the rules being effective as of April 22. The order says it recognizes that 40 states have established their own a medical marijuana frameworks.

The order says there is a “high prevelence of non-medical use of marijuana” but marijuana has fewer “serious outcomes” than other Schedule I drugs. The order tells researchers they will not face civil or criminal liabilities for licensed marijuana research.

The order also encourages the Department of Treasury to “consider providing retrospective relief … for taxable years in which a state licensee operated under a state medical marijuana license.”

Adult use marijuana remains Schedule I.