Editor’s Note (Update, December 19, 2025):
24 hours ago, President Donald Trump signed an executive order that directs federal agencies to proceed with the reclassification of marijuana from Schedule I to a Schedule III controlled substance, as reported by the BBC and other major outlets.
This article was originally published in September 2025. The title and article have been updated to reflect new developments. See the full update at the end of the article for details on how this measure could speed up federal legislative decisions in 2026.
In early August 2025, President Trump announced that he hopes to make a decision “in the coming weeks” or whether it reclassifies marijuana from Schedule I to Schedule III, a policy change that could trigger the largest wave of federal marijuana legalization in history.
The redistricting would not have made marijuana legal nationwide for recreational use. But it could solve a major financial problem that keeps districts hesitant about legalization. Currently, marijuana businesses cannot claim a regular tax deduction because marijuana is Schedule I, the same category as heroin and LSD. The move to Schedule III would allow these businesses to deduct expenses like any other company, making the industry more profitable and attractive to state lawmakers.
The timing couldn’t be better. 15 states already have medical marijuana programs, but have yet to legalize recreational use. They have built regulatory systems and proven that they can manage cannabis policy. But they watched the flow of tax money from neighboring states that went completely legal.
How Organizational Restructuring is Changing the Game of Nations
24 states have fully legalized marijuana, according to DISA data for September 2025. Another 4 states show strong signs of moving next. These candidate states operate so-called mature medical systems, meaning they have operated medical marijuana programs for years, serving hundreds of thousands of patients through licensed facilities. But residents still need to drive across state lines to buy recreational cannabis, sending millions in tax dollars to competitors. Trump’s marijuana policy adds pressure to act quickly before neighboring countries seize more businesses. Local business groups have stopped fighting legalization and are now focusing on how to set up retail operations.
Four Countries Ready to Go First
in Pennsylvania
Pennsylvania has about 446,000 medical marijuana patients, but recreational marijuana remains illegal. Most residents simply drive to New Jersey to buy legal. New Jersey’s cannabis market is projected to reach $1 billion in sales by 2024, and state analysts estimate that Pennsylvania’s legalization could bring in nearly $250 million a year in tax revenue. That money is important as the state faces a budget deficit that has delayed the payment of schools and services. Meanwhile, local merchants lose sales and jobs as money crosses the border.
New Hampshire
All New England states except New Hampshire collect tax money from recreational clubs. Maine, Vermont, and Massachusetts attract New Hampshire residents who cross the border to buy legally, sending money away from local stores. New Hampshire already has medical marijuana programs and has legalized possession, so the framework and public acceptance is in place. Budget-conscious lawmakers now face a choice between keeping the restrictions in place and bringing that tax money home.
In Florida
Florida operates the nation’s largest medical marijuana program with nearly 900,000 patients, but voters fell short of full approval in November 2024 when the vote passed 56% to 44% but missed the 60% needed to change the state constitution. Lawmakers responded by introducing new bills to legalize marijuana in the legislature by 2025 instead, while officials simultaneously made it harder for citizens to find ways to vote in the future, laws that are now facing court challenges. Florida continues to lose millions in tax and tourist dollars to legalized states like Colorado that have built thriving cannabis tourism industries.
in Kentucky
Kentucky launched its medical cannabis program this January, but the real driver of recreational legalization is coming from the tobacco world. The state’s struggling tobacco farmers view marijuana cultivation as alienating valuable crops. Governor Andy Beshear is framing marijuana in terms of economic development rather than social policy language. Commercial establishments traditionally resistant to social change are now supporting marijuana as a business opportunity. Cannabis provides one of the few crops that can bring in large amounts of rural income, making Kentucky’s approach to legalization more about farm economics than urban politics.
From Social Justice to Balance Sheets
Trump’s marijuana overhaul would eliminate a federal tax law that treats marijuana companies like drug dealers. Currently, these businesses cannot write off basic expenses like rent, wages, and equipment that all other companies automatically deduct. Removing marijuana from Schedule I to Schedule III will allow marijuana businesses to operate under normal tax laws.
This tax penalty has kept marijuana businesses unprofitable while states look at potential revenue. Pennsylvania politicians are counting revenue losses while cutting the budget. New Jersey has collected more than $43 million in tax revenue from marijuana sales that could reach $1 billion by 2024. Pennsylvania taxes its residents on purchases what New Jersey taxes on purchases.
Even the opposition parties changed positions. The American Farm Bureau has joined efforts to legalize hemp as Kentucky tobacco farmers have watched their returns drop from $1,000 an acre to just $100 in the past 20 years.
Trump’s cannabis policy has sparked moral controversy. Marijuana stopped being a culture war and became a fiscal policy. Politicians who used to talk about public values are now talking about tax revenues and budget gaps.
When Everything Goes Right
Trump’s reversal of cannabis policy is creating an opportune time for several states. Pennsylvania enters 2026 budget negotiations with new state laws already in place. New Hampshire is starting the year with a new governor after watching the money flow from neighboring states for years. Kentucky farmers face March crop decisions with suddenly profitable marijuana plantings under the new tax structure.
Stress builds differently everywhere. Florida is losing tourists to Colorado as business groups pressure lawmakers to skip ballot measures. Each state moves makes prohibition more expensive for neighbors who pay the cost of enforcement but receive nothing. Federal reform removes tax penalty that destroys cannabis profits. The first states to operate in 2026 take the best. The dominoes start to fall and whoever moves first.
Review (December 2025): Organizational Restructuring From Signal to Action
In the past 24 hours, President Donald Trump has taken official action to advance the rescheduling of marijuana, signing an executive order directing federal agencies to move marijuana from Schedule I to a Schedule III controlled substance. The move marks a concrete step by the government to reform America’s marijuana policy, as reported by the BBC.
While the order does not legalize marijuana at the federal level, it formally abandons the long-standing position that cannabis has “no acceptable medical use.” The BBC reports that administration officials made the change as an acknowledgment of the medical importance of marijuana and the recognition that federal policy is inconsistent with state law and scientific research.
According to a White House statement, the executive order directs the Department of Justice and Drug Enforcement Administration to expedite the decision-making process necessary to complete the reclassification. The administration also emphasized that moving marijuana to Schedule III will lower barriers to medical research and increase access to cannabis-based treatments, especially cannabidiol (CBD).
One of the most important consequences of going down can be financial. As the BBC notes, marijuana reform could eliminate a federal tax law that prevents marijuana businesses from deducting general expenses, a penalty that has squeezed profits even in legal marijuana markets. Removing that burden would dramatically change the economics of legalization in states that have been overwhelmed by medical systems.
Despite this change, marijuana will remain illegal for recreational use under federal law, and the executive order does not address broader issues such as interstate commerce, banking access, or federal legalization. The BBC reports that critics argue those questions will still require congressional action, even if the plans are rescheduled.
Change is also slow. Government agencies still have to complete the formal regulatory process, which could take months and potentially face legal challenges. Still, the order removes uncertainty about the organization’s mission and shows that management expects the reorganization to move forward rather than stand still.
Taken together, the December action turns Trump’s previous comments into enforceable federal guidance. While it stops short of legalization, it removes one of the most damaging barriers to cannabis markets, reinforcing the financial logic that is already pushing states like Pennsylvania, Florida, New Hampshire, and Kentucky into legalization. For state policymakers, the question is no longer whether federal policy will change, but how quickly they act once it does.
Disclaimer: This article was, in part, created with the help of AI and edited by a human for accuracy and clarity.
Read more: How Marijuana Affects Your Body Minute by Minute as Trump Plans Big Changes to US Laws
