Updated Dec. 18, 2025, 3:14 p.m. ET
WASHINGTON – President Donald Trump signed an executive order Dec. 18 to federally classify marijuana as a less dangerous substance, the biggest change for the drug since 1970 and an opportunity for the industry to operate more easily.
Trump directed the government to stop classifying marijuana as a Schedule I drug, which includes the most dangerous substances such as heroin, LSD and ecstasy. The Drug Enforcement Administration describes Schedule I substances as having no “medical use and a high potential for abuse.”
Instead, Trump ordered that marijuana be classified as a Schedule III drug, which the DEA describes as having “a moderate to low potential for physical and psychological dependence.”
“Today, I’m pleased to announce that I will be signing an executive order to reschedule marijuana from a schedule one to a schedule three controlled substance with legitimate medical uses,” Trump said.
He added that the order “is not the legalization − does it legalize marijuana in any way, shape or form, and no way sanctions its use as a recreational drug.”
Trump’s order directed Attorney General Pam Bondi to “take all necessary steps to complete the rulemaking process” to reclassify marijuana as a Schedule III drug. His order also said the administration would work with Congress to redefine hemp-derived cannabinoid products so that Americans can get access to CBD products.
Marijuana businesses expect to benefit from reclassification
Trump’s change doesn’t make marijuana legal at the federal level. But the reclassification could lower tax burdens for firms, accelerate research, enable standardized drug development and improve access to capital.
Shares of cannabis firms rose in premarket trading Dec. 18 because of expectations about Trump’s action. Tilray shares gained nearly 5%, SNDL rose 3%, Canopy Growth was up more than 5% and AdvisorShares Pure US Cannabis was up 6.5% before the bell.
Trump is considering a Medicare pilot program that would provide some seniors access to CBD, according to reports.
Rescheduling and Medicare coverage would likely attract investments from financial institutions and other investors.
Nearly all states regulate marijuana but it remains contentious
The federal Controlled Substances Act lumped marijuana with the most dangerous drugs in 1970.
Since then, two dozen states, three territories and the District of Columbia have allowed or regulated recreational use of marijuana, according to Reuters. Nearly all states – 45 – allow the medical or recreational use of marijuana.
Nearly two-thirds of Americans supported legalization in a Gallup survey from October, up from 36% two decades ago.
But the push to decriminalize marijuana by removing criminal penalties associated with it or to legalize it at the state level remains contentious.
Ohio Gov. Mike DeWine has said he would sign legislation approved this month further restricting where marijuana can be grown. Businesses have sued DeWine over a ban on over-the-counter sales of products infused with THC, the intoxicating element in marijuana.
A Florida ballot initiative in 2024 aimed to legalize marijuana for people at least 21 years old, and allow them to possess up to 3 ounces. Supporters spent hundreds of millions of dollars advocating for the measure, but Gov. Ron DeSantis strongly opposed it. Despite support from nearly 56% of voters, the measure fell short of the 60% majority needed for approval.
Trump’s stance on marijuana contrasts with enforcement against other drugs
Former President Joe Biden ordered the Department of Health and Human Services to review marijuana’s classification in 2022. The administration in 2024 proposed a rule to reschedule marijuana, but it has been on hold since March.
Trump has considered the change for a while. He said in August he was “looking at reclassification” of marijuana, noting the issue has supporters and detractors.
“Some people like it, some people hate it. Some people hate the whole concept of marijuana,” he said.
Trump’s stance on marijuana contrasts with his aggressive approach to drug enforcement against fentanyl and cocaine. During his second term, the Pentagon has been striking alleged drug boats off the coast of Venezuela.
But during the 2024 campaign, Trump supported a Florida ballot measure that would have legalized the drug in the Sunshine State. The measure failed.
“I believe it is time to end needless arrests and incarcerations of adults for small amounts of marijuana for personal use,” Trump said in his statement about the Florida ballot initiative.
This story has been updated to add new information.
