President Donald Trump signed an executive order last week directing the Attorney General to expedite the reclassification of marijuana from a Schedule I down to a Schedule III substance in the Controlled Substances Act, a move that is expected to be a major financial win for Ohio’s cannabis industry.

The reclassification puts marijuana in a lower scheduling category alongside other drugs with accepted medical uses and considered to have lower potential for abuse – including Tylenol with codeine, ketamine and anabolic steroids. The move does not mean that marijuana is federally decriminalized, and it is not expected to have any discernable effects on state-level legal cannabis programs, including Ohio’s.

“To the average patient and consumer of licensed cannabis products, not much will change, at least on the surface. State licensed cannabis programs are not dispensing FDA-approved drugs, so consumers can expect little to no change in how these programs function in the short term,” said Greg May, an attorney at Ice Miller LLP who provides counsel to clients on state and federal cannabis issues.

“However, over time, as the public perception of licensed cannabis shifts to a more favorable view, patients and consumers can expect greater access to products, more research-based information and education centered around responsible consumption, and evolving rules and regulations that align more with how alcohol is regulated.”

May said the biggest benefactors to the eventual reclassification will be cannabis businesses, who will face significantly less tax burdens with the change.

Under Schedule I status, licensed medical and adult use cannabis businesses in legal states are not allowed to take standard business deductions, which results in effective tax rates on these businesses of up to 70% or more. Moving the drug to Schedule III will allow businesses to legally claim standard business deductions like any other business.

May explained that cannabis businesses could also eventually have access to other federally granted benefits such as federal bankruptcy relief and trademark protection that have also been denied to them. Cannabis businesses, in time. could also face fewer barriers to banking, with most federally chartered banks having refused to bank licensed cannabis businesses while the drug has been classified as Schedule I.

David Bowling, executive director of the Ohio Cannabis Coalition, applauded the benefits to businesses, calling the move “an important and long-overdue shift in federal policy.”

“For Ohio businesses, rescheduling could bring meaningful financial relief, including potential changes to federal tax treatment,” Bowling said in a statement. “This will benefit not only operators but the thousands of people who are employed by the industry.”

State Rep. Tex Fischer, a Mahoning County Republican who’s been a leading advocate of marijuana access in the Ohio legislature, echoed Bowling’s sentiment.

“At the end of the day, these are businesses. They need to be treated like the same business friendly climate our state has for virtually every other industry,” Fischer said.

Trump’s order cited FDA findings that marijuana has scientific support for treating pain, nausea and anorexia. The order states that 40 states and Washington, D.C., have medical marijuana programs serving more than 6 million registered patients, yet federal restrictions have limited research.

May explained that rescheduling will make it easier for both federal and state sponsored research to be conducted with less bureaucratic red tape.

“While it may take years to fill the void of this research caused by over 50 years of cannabis being classified under Schedule I, the impact of this research will ultimately enable states, including Ohio, to utilize this research to develop more evidence-based dosing and consumer safety-oriented guidelines,” May said.

Trump’s executive order doesn’t change the law immediately. The process for rescheduling cannabis began under President Biden’s administration when the Department of Health and Human Services recommended the change in 2023.

Trump’s order speeds things up, but it could still take several months, and possibly longer if there are legal challenges. Until then, marijuana remains a Schedule I substance under federal law.