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Contents
Current Situation
Cannabis remains illegal at the federal level in the United States under the Controlled Substances Act, where it is still classified as a Schedule I drug. This category is reserved for substances considered to have no accepted medical use and a high potential for abuse.
At the same time, many U.S. states have moved forward with legalizing cannabis for medical or recreational use. This creates a legal clash between state-level reforms and the strict federal ban. While cannabis businesses thrive in certain states, they still face federal barriers such as taxation rules, banking restrictions, and limited research opportunities.
Key Federal Initiatives in Progress
1. DEA Rescheduling
The Department of Justice, through the DEA and with recommendations from the Department of Health and Human Services (HHS), is currently reviewing cannabis scheduling. The most likely move would be shifting cannabis from Schedule I to Schedule III.
This change would:
- Reduce regulatory restrictions.
- Make medical research easier.
- Lower federal tax burdens on cannabis businesses.
However, it would not fully legalize recreational cannabis nationwide. States would still decide how cannabis is regulated locally.
2. Federal Bills for Legalization or Deregulation
Several bills are under discussion in Congress:
- Cannabis Administration and Opportunity Act (CAOA): Aims to completely remove cannabis from the Controlled Substances Act, eliminate federal penalties, allow states to regulate freely, and clear past criminal records.
- Ending Federal Marijuana Prohibition Act: Another proposal to remove cannabis from federal prohibition.
- STATES 2.0 Act: Focuses on giving states full autonomy while preserving protections where cannabis is already legal.
3. Medical Research, Hemp THC Products, and Market Regulation
- Medical Research Expansion: Efforts are underway to simplify and expand research approvals. Currently, Schedule I status makes cannabis research extremely difficult.
- Closing Loopholes on Hemp THC Products: Federal lawmakers are under pressure to regulate intoxicating hemp-derived products that fall through gaps in current laws.
- State-Level Regulation: Many states are creating advisory boards and agencies to oversee cannabis use, taxation, packaging, and public health. For example, North Carolina recently formed an advisory council to study adult-use regulation.
Possible Next Scenarios
Here’s what the future of cannabis reform could look like:
| Scenario | What It Would Achieve | Main Challenges |
|---|---|---|
| Rescheduling to Schedule III | Easier research, lighter tax burden, improved banking access, strong signal of federal change. | Slow regulatory process, political resistance, limited impact on recreational use. |
| Complete Deregulation (Descheduling) | Removes cannabis from federal control, uniform federal laws possible, interstate commerce, record expungement, huge industry boost. | Strong conservative opposition, need for congressional majority, public health debates, risk of lawsuits. |
| More State-Level Legalization | More states legalize adult use, stronger regulation on health and safety, pressure on federal government to act. | Regional differences, failed referendums, uneven quality standards, risk of black market growth. |
| Sector-Specific Reforms | Banking access, reduced criminal penalties, expungement, better medical insurance coverage. | Fragmented reforms, limited benefits without full legalization, strong lobbying against. |
Timeline: What to Expect
Short Term (2024–2026):
- Likely rescheduling from Schedule I to Schedule III.
- Passage of smaller reforms like the SAFER Banking Act and expanded research access.
- More states could legalize adult use through referendums or legislative action.
Medium Term (2026–2028):
- If momentum builds, complete federal deregulation may become viable.
- Broader reforms could pass depending on the political makeup of Congress and the White House.
- The U.S. cannabis industry could expand into interstate commerce, with more uniform regulations.
Final Thoughts
The future of cannabis in the United States is at a turning point. While cannabis remains federally illegal, pressure is mounting from states, consumers, businesses, and even health regulators to modernize laws. The coming years will determine whether the U.S. moves toward incremental reforms or a full legalization framework.
For now, the industry operates in a gray zone — booming at the state level but restrained by federal law. What happens next could reshape not only the cannabis market but also public health, criminal justice, and the U.S. economy.
