COLORADO SPRINGS — Colorado cannabis leaders expressed cautious optimism with a “wait-and-see” approach after the Department of Justice announced it was reclassifying state-licensed medical marijuana and FDA-approved marijuana products to a less regulated grouping.

Acting Attorney General Todd Blanche signed an order last Thursday to move medical marijuana from the strictly regulated Schedule I, which includes the likes of highly addictive drugs without medical use, like heroin, to the less regulated Schedule III with prescription drugs like Tylenol.

“Colorado is already so far ahead on cannabis policy that it may not be quite as an immediate impact felt here,” said Mason Tvert, spokesperson for Colorado Leads, a trade association representing Colorado’s cannabis industry. “We will have to really see how this fits in with our existing system.”

Forty states, three territories, and the District of Columbia allow the medical use of cannabis products as of June 2025, according to the National Conference of State Legislatures.

24 states, three territories, and the District of Columbia allow or regulate cannabis for non-medical use. In Colorado, it’s often referred to as recreational, retail, or adult-use.

Colorado voters legalized medical marijuana in 2000 and were the first state, along with Washington, to legalize recreational use in 2012.

“Colorado is one of many states that has both an adult use and a medical regulatory system,” Tvert said. “And so there will need to be a way to differentiate cannabis between those two programs. That’s certainly doable, but there are a lot of details that are gonna need to be figured out.”

Other advocates were concerned that Big Pharma could step in since Schedule III drugs are supposed to be dispensed in pharmacies.

Colorado currently has 278 medical marijuana stores and 671 retail cannabis stores, according to state data. Many of those overlap for both types of business.

The Biden Administration began the process of rescheduling cannabis before Trump took office for his second term. President Trump signed an executive order in December to push forward with the plans.

“The Department of Justice is delivering on President Trump’s promise to expand Americans’ access to medical treatment options,” said Acting Attorney General Todd Blanche. “This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information.”

Blanche’s order also allows tax breaks for state-licensed medical marijuana operators, which industry advocates said was perhaps the most impactful aspect of the federal changes.

In what’s known as Section 280(e) of the Internal Revenue Service Code, medical marijuana businesses were severely limited in their tax deductions.

“Under current law, up until today or when it was signed, owners could not deduct anything as a business expense, as any other business would be able to,” said Jason Warf, executive director of the Southern Colorado Cannabis Council.

“The medical side of the industry has really struggled for a while, and I hope this is the boost, a boost that will help them,” said Warf.

Governor Jared Polis, a Democrat and longtime advocate of marijuana legalization, praised the move and said it was a step in the right direction.

“It’s high-time the federal government is finally catching up to states like Colorado that have led on safe, regulated medical and adult-use cannabis,” Polis said in a statement.

He went so far as to call for the government to “deschedule” cannabis altogether.

Though acting Attorney General Blanche’s order doesn’t seek to fully legalize cannabis under federal law, it does aim to streamline the process of broader rescheduling for all cannabis with a hearing scheduled for this summer.

“We are encouraged to see the administration establish a clear timeline for the administrative hearing process to consider broader changes to marijuana scheduling. This is a critical step to ensure that progress continues in a transparent and timely manner,” said Chuck Smith, CEO of Colorado Leads, the cannabis trade association.

Smith said they’ll be watching closely as the process moves forward and called the DOJ’s order as having “relatively narrow” immediate effects in Colorado.

However, not everyone is enthusiastic about the move. The group One Chance to Grow Up, which, in its words, “seeks to protect kids from marijuana,” expressed concern.

“There has never been a greater need for robust protections for kids in marijuana policies than right now,” said One Chance Executive Director Henny Lasley.

“States and federal policymakers must understand the impacts rescheduling and legalization have on the normalization among kids, who may perceive it as a wellness product,” Lasley said.

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