President Trump has just moved to follow the Biden Administration’s recommendation to reschedule marijuana from Schedule I to Schedule III.
What does this mean?
The drug has NOT been legalized at the federal level. In that sense it is an utter failure, not a victory, for the industry: They have been fighting for decades and have spent tens of millions to federally legalize the drug. But it is true that the industry wanted this outcome and stands to benefit via massive tax relief and an increased public perception that marijuana is somehow a ‘safe’ drug.
The biggest immediate consequence of this move will be to change marijuana’s status under the federal tax code. Marijuana companies can now deduct ordinary business expenses—like advertising. Section 280E of the tax code has been a longstanding restriction on the industry’s capacity to flood the zone with hyperaggressive advertising. 280E applies to Schedule I and II drugs—not Schedule III.
This means weed businesses will gain expanded revenues and reach. This, in turn, means an increase in use. Kids and teens will be a driver of that: Recent, horrific data from The University of Southern California and Rutgers shows that exposure to weed posts on social media drastically increases the chances of a teen initiating use.
Expect bad social effects from all this. Marijuana is linked to schizophrenia; a massive Dutch study suggested that as much as 30% of schizophrenia among younger men is linked to cannabis-use disorder. A 2024 US study found a linkage between violence and marijuana use and younger men. And another 2024 study found major connections to weed access and persistent increases in serious crime.
In other words, expect a supercharged legal market and all the social decay that will cause. Don’t forget that supercharged legal markets tend to supercharge illegal ones as well: Look at the estimated 3,600 illegal pot shops in NYC versus the mere dozens of legal ones. Remember too that the illegal trade in the US has deep links both to narco cartels and Chinese growers, and that China’s government has serious connections top the latter as well.
The one upside here is that, as a Schedule III substance, marijuana is now subject to FDA oversight and enforcement as well as DEA/Justice Department oversight and enforcement. Sellers of Schedule III drugs, for example, are not allowed to make off-label therapeutic claims—and given that there are no FDA approved uses for marijuana (the plant; there are FDA approved drugs derived from it), that could be a stumbling block.
What do we do now?
There are plenty of paths for citizens to fight back against this terrible outcome.
For one, the No Deductions for Marijuana Businesses Act, introduced in Congress by Rep. Jodey Arrington and Sens. Pete Ricketts and James Lankford. That bill aims to ensure that even in Schedule III, weed faces restrictions similar to those outlined under 280E.
And grassroots efforts in Maine and Massachusetts to end all commercialization and sales of weed are now getting off the ground, with SAM’s investment and guidance. Americans are fighting back: More than 74,000 people signed the Massachusetts initiative, and the measure will soon face legislative review.
Above all: Get educated. Use the resources available here on The Drug Report (and here) to make sure your city, state, and federal representatives and regulators act to protect public health and safety. If you or your family has been harmed by weed, reach out to our Parent Action Network here.
It’s a new world, and a new fight. But we can win it if we stand together.