It was announced on Thursday that the Controlled Substances Act had shifted the medical marijuana, which is regulated by the U.S. government, from Schedule I into Schedule III.
The Trump administration signed the order earlier today, as first reported by Associated Press. This came after months of increasing pressure in the Department of Justice. It immediately changes how cannabis is defined under federal law—formally acknowledging its accepted medical use for the first time since 1970, though it stops short of full federal legalization.
The rescheduling today of cannabis is a turning point historical for the industry. It also represents a modernization in federal policy that has been long overdue, according to Darren Lampert. GrowGeneration Corp. is a retailer specializing in equipment and nutrients used by commercial growers as well as serious home-grown cultivators. The new law recognizes that cannabis has a legitimate medical use, promotes scientific research and lifts restrictions on responsible business and patient access.
Lampert noted that this change could immediately have ripple effects on the cannabis market.
He said that the decision would create a better foundation for innovation, investment and job creation throughout the entire supply chain. For companies such as GrowGeneration that support operators and cultivators across the country, more regulatory clarity can help to accelerate growth.
Washington has officially changed its position since 1970 that cannabis used for medical purposes is of no medical benefit. This is important because for over 50 years the federal government classified marijuana as the same thing as heroin despite the fact that nearly 40 states had medical cannabis programs and millions of people were using it legally.
Exclusively by DEA, we obtained the DEA Order Cannabis Now White House acknowledges officially what most of the nation has accepted already: Cannabis no longer is defined under federal law as it was at the height of prohibition.
“This is a meaningful step forward—and a long overdue acknowledgment of reality,” said National Hemp Association Chairman Geoff Whaling. “While this action does not directly impact hemp—already removed from the Controlled Substances Act under the Agriculture Improvement Act of 2018—it is another significant step in normalizing the broader cannabis category. “And that’s important.”
The Long Road to Recognition
The cannabis community feels today’s events are more than just a policy issue.
Over decades, people have been arrested for a system that denied marijuana’s medical validity. Patients testified in court, activists protested, families struggled to gain access and communities created legal markets. Today’s announcement does not erase that history—but it changes the federal tone in a way that many believed would take much longer.
The question also arises of what will happen to those thousands who have been incarcerated or are carrying criminal records because they were involved in conduct related to an herb that is now partly recognized by the federal authorities as being medically valid.
True Terpenes’ CEO, Daniel Cook stated that this is a major change to the drug policies in the United States in over 50 years. The bill legitimizes 40 state medical marijuana programs, expands legal research and provides 280E tax relief for licensed medical operators in those states who had been paying effective taxes of up to 70%.
Cook continued that, while this shift is important, it does not go far enough to reach the final destination the industry must achieve.” Cannabis shouldn’t be Schedule III—it belongs in a single-plant regulatory framework alongside hemp. This is an important step and industry should celebrate.”
Schedule III will not release any prisoners or invalidate prior convictions. Criminal penalties relating to cannabis activities that are not licensed remain. Politically and culturally the contradiction gets harder to ignore. As cannabis gains medical status, the pressure on sentencing reforms, pardons and expungements will increase.
Immediate Financial Impact
Legal operators will immediately see a financial benefit, as they can now deduct ordinary expenses from their taxes, which was previously prohibited by IRS Code 280E. This rule was one of the most burdensome hidden taxes in cannabis legalization, forcing many profitable businesses into unworkable tax structures.
Kevin Pattah is the CEO of Mango Cannabis. He said that reclassification would allow cannabis companies to be taxed more similarly to traditional businesses, creating a sustainable and fair operating environment.
The public markets responded within hours.
GrowGeneration, one of the most well-known cannabis ancillary companies in the industry, was among the leaders. GrowGeneration is more strategic than plant-touching companies because they support cultivation, but do not sell cannabis directly.
Today, the stock surged sharply, climbing from an opening level near $1.44 to an intraday high around $1.57, a jump of roughly 18–19% at peak trading, with volume accelerating well above recent daily averages. This type of movement reflects the belief among investors that, if cannabis companies suddenly became healthier financially, then cultivation infrastructure firms like GrowGeneration could benefit rapidly as operators restart expansion, upgrades, and facility investments.
As a result, several of the largest cannabis producers in the United States have also raised their prices:
- Curaleaf’s price surged after investors priced-in possible improvements in margins due to reduced tax pressure.
- Trulieve Cannabis has also seen a sharp rise, which reflects renewed optimism about multi-state operators who have strong medical exposure.
- Green Thumb Industries climbed the ranks as its traders moved to companies that have strong retail and medical markets.
The Next Step
These gains are important, but they do not tell the whole story. Cannabis proves that culture follows policy, even though it is slow.
For years cannabis has existed in two Americas at once—openly sold, taxed, prescribed and normalized in one part of the country, while still burdened federally by language rooted in another era. This divide is narrowing today.
Also, research will expand. Now, universities, hospitals and biotech firms, as well as medical institutions, should face less barriers in studying cannabinoids. This could result in a stronger clinical validity, wider insurance discussions and ultimately more sophisticated cannabinoid medicines.
This is still not a full legalization.
Cannabis for adult use is still illegal under federal law. Interstate commerce remains blocked. The banking reform is still unresolved. The fragmentation of states remains.
The next stage of fragmentation is possible.
Dave Marrow, of Lume Cannabis Michigan said that the DEA’s hearings for rescheduling will begin on June 29. This process may take a while. This only pertains to medical cannabis sold by state licensed retailers, as the vast majority of marijuana sales are for adult use in the United States.
Marrow also said regulatory structures could begin to converge at the level of the states: “I’m sure that those with adult-use program licenses will include medical sale under the same structure,” he added.
One thing has become clear after a half century of federal resistance: the United States government is no longer saying that marijuana has no medical use in American culture.
For an industry that has been built up by those who have often moved before permission from the federal level was granted, this moment holds real importance today.