A Trump administration order moves Illinois state-licensed medical cannabis to Schedule III, enabling federal tax deductions and potentially faster research. Industry says it’s a start, but deeper reform is still needed.
The Trump administration’s latest shift on marijuana scheduling is set to deliver a major financial advantage to some Illinois medical cannabis businesses—while reigniting a familiar debate over what changes are still missing.
Acting U.S.. Attorney General Todd Blanche signed an order that reclassifies state-licensed medical marijuana from Schedule I to Schedule III.. Schedule I is reserved for drugs considered to have no accepted medical use and a high risk of abuse.. Schedule III is less restrictive. and the order also applies to cannabis products that have been approved by the U.S.. Food and Drug Administration.
For operators in Illinois. the practical impact is clear: the policy change can allow medical cannabis companies to deduct business expenses on their federal taxes.. That matters because, in the current system, many businesses face uneven treatment compared with other regulated industries.. George Archos. founder and CEO of Verano—operator of multiple Zen Leaf dispensaries in the Chicago area and beyond—said the company could save an estimated $80 million per year from the new tax treatment.. He argued that those savings could be reinvested into operations and help put licensed businesses on a more level playing field.
The administration’s move is also designed to lower barriers to research.. By shifting medical cannabis to a different federal schedule. the government is effectively clearing a path for more scientific study under a less restrictive framework.. Blanche’s order sets up an expedited Drug Enforcement Administration hearing process beginning June 29 to consider whether broader reclassification—beyond medical products—should move to Schedule III.
Industry leaders have framed the decision as overdue progress toward treating cannabis based on evidence rather than politics.. Charlie Bachtell. CEO of Cresco Labs. which operates dispensaries in Illinois under the Sunnyside brand. called the step a “long-overdue” alignment with science.. His message to patients and providers: a schedule change could mean expanded research, better data, and more informed medical care.
Still. critics say the shift doesn’t resolve the broader contradictions that have defined the cannabis industry for years—especially the mismatch between federal and state law.. Mike Feldman. general counsel for Nabis. the largest cannabis distributor in the U.S.. argued that the order creates a world where the same substance can be treated differently depending on where it is purchased.. In his view, the scheduling system is supposed to follow consistent rules for drugs, not vary by context.
That tension is more than legal theory for many people.. Even as some businesses may gain tax relief. the industry still operates under constraints and uncertainties that can shape hiring. banking. and everyday operations—issues workers in the sector feel long before they show up on corporate balance sheets.
Beyond scheduling, reform advocates are pressing for changes that go further than tax deductions and research pathways.. Betty Aldworth. chair of the Marijuana Policy Project. said the order does not address the core contradictions between federal and state frameworks.. Her concerns include the continuing risk to workers and communities. particularly in relation to cash-heavy business models. and the way cannabis-related consequences can ripple into housing. immigration. employment. and family law.. She also argued that patients still face gaps in how cannabis can be accessed. including whether insurance coverage could play a role.
Opponents of legalization and reclassification argue that federal changes that benefit the industry should not be treated as a substitute for meaningful investment in research and public health.. Kevin Sabet. president of Smart Approaches to Marijuana. criticized the move as prioritizing tax breaks without directly funding the research needed to evaluate cannabis’s risks and benefits.. He framed the approach as potentially repeating a pattern where profit drives decisions faster than health safeguards.
While the administration’s order changes the schedule for medical cannabis, recreational cannabis remains federally illegal under Schedule I.. At the state level, the map remains uneven: 24 states plus Washington D.C.. have legalized adult recreational use. 40 states allow medical marijuana. and eight others permit low-THC cannabis or CBD oil for medical use.. Only Idaho and Kansas still ban marijuana outright.
Illinois provides a particularly telling backdrop for this policy shift.. The state has roughly 50. 000 monthly medical marijuana patients—down from more than 70. 000 in 2021—yet similar to levels seen after recreational legalization began in 2020.. In recent months, revenue trends have reflected the same churn.. Illinois collected $13 million in medical marijuana sales in February. down from $20 million in the same period last year. while recreational cannabis sales reached $105 million in February.
For Illinois businesses. the scheduling change is likely to feel like a sudden jolt of financial realism: deductions that were previously out of reach can change cash flow. and that can influence whether companies hire. expand. or invest in new operations.. But for lawmakers and regulators nationwide. the order also underlines a larger question—whether federal policy can keep evolving without fully addressing the legal and practical friction that still surrounds cannabis in daily life.
A June 29 DEA hearing process may offer additional clues about whether the administration is willing to extend the logic of reclassification further.. For now. Illinois’s medical cannabis market stands at the intersection of opportunity and unresolved conflict: a potential tax and research advantage. paired with continued uncertainty about what “reform” should ultimately mean for patients. workers. and communities.