Federal restrictions on marijuana are scaling back following its reclassification from a Schedule I controlled substance to Schedule III, though the fight for full federal legalization continues.
Under the reclassification, cannabis moves from the more strictly regulated Schedule I category, alongside substances such as heroin and LSD, to Schedule III, which includes drugs such as acetaminophen and steroids. This shift reflects the federal government’s recognition of medical cannabis as having moderate to low potential for physical and psychological dependence, and legitimizes medical marijuana programs in 40 states, including New Jersey.
McCarter & English partner Ryan Magee told NJBIZ that “By prioritizing FDA-approved and medical cannabis, the federal government is drawing a line that could still disadvantage large portions of the adult-use market. This is a clear signal that federal reform may come through a medical lens first, not through full legalization.” He added, “The real impact of this order will depend on how aggressively DOJ and DEA follow through — this is momentum, not completion. We’re not at the finish line — but we’re potentially entering the most consequential phase of administrative rulemaking. If Schedule III status applies broadly enough, the real headline isn’t rescheduling — it’s the possible erosion of 280E, which has been the single biggest drag on cannabis profitability.”