Justice Department reclassifies marijuana as less dangerous drug: What does it mean?

The Justice Department has signed an order related to the reclassification of state-licensed medical marijuana.

In the reclassification, officials labelled it as a less dangerous drug. This move marks a significant federal cannabis policy change in decades.

Attorney General Todd Blanche reclassified legal medical marijuana from Schedule I – the most restrictive, which includes drugs such as heroin and ecstasy – to Schedule III, which includes prescription drugs like ketamine and Tylenol with codeine.

While this order does not legalise the recreational use of marijuana federally, it gives a huge tax break for those legally selling medical marijuana.

Blanche wrote on X (formerly known as Twitter), stating: “These actions will enable more targeted, rigorous research into marijuana’s safety and efficacy, expanding patients’ access to treatments.”

The announcement was made after President Donald Trump issued an executive order to the Justice Department to speed up the reclassification process.

For medical marijuana businesses, the immediate change is related to taxes.

However, as marijuana was categorised under Schedule I before, the deduction of regular business expenses such as rent, wages, or advertising by the company was prohibited according to the guidelines of the Internal Revenue Service's Section 280E. This made the effective corporate tax rate rise to 70 per cent or more.

At the same time, businesses can attract more investors, secure loans, and access traditional banking services easily.

Patients, on the other hand, won’t see direct changes in access or pricing immediately.