In December 2025, the Trump administration accelerated the process of reclassifying marijuana from Schedule I to Schedule III under the Controlled Substances Act – a shift that would reduce restrictions and penalties associated with the drug.
Under the move, medical and recreational marijuana would still remain illegal at the federal level. At the state level, medical use is currently legal in 40 states and the District of Columbia, and recreational use is permitted in 24 states and Washington, D.C. While the administration touted the medical research benefits of rescheduling, the medical and recreational marijuana industry lauded it for an entirely different reason: income tax savings.
Indeed, one of rescheduling’s most significant – and most immediate – effects would be tax relief for all legal marijuana businesses in the states that host them.
