Trump’s order directs the Department of Justice to move the existing process forward to consider rescheduling marijuana from Schedule I to Schedule III. Schedule I, the most restrictive category under federal law, indicates a high likelihood of abuse and no accepted medical value.

For years the cannabis industry has lobbied the federal government to change the classification of marijuana, which would make it easier to transport products and well as allow cannabis companies more banking and funding options.

The previous administration initially started this process when President Joe Biden ordered a scientific and regulatory review of marijuana’s federal status, but that process lagged and ultimately stalled in administrative purgatory, said Justin Brandt, a cannabis attorney at Bianchi & Brandt.

“President Trump’s executive order is a clear attempt to push it across the finish line and force action,” Brandt said. “For businesses, the difference between endless review and an actual outcome is significant.”

Trump said the move reflected that cannabis could have medicinal value, even if abuse was still possible.

The order “doesn’t legalize marijuana in any way, shape or form and in no way sanctions its use as a recreational drug,” Trump said. “Just as the prescription painkillers may have legitimate uses but can also do irreversible damage … it’s never safe to use powerful controlled substances in recreational matters.”

Still, the order marks a major step in the decades-long liberalization of cannabis policy. That trend has been felt in Arizona, where recreational cannabis generated $272.7 million in total tax collections in the 2025 fiscal year, which ended in June. While that’s down from $290.6 million during the 2024 fiscal year, cannabis generates considerably more tax revenue than sports gambling — another recently legalized vice.

A 2024 Business Journal analysis found that cannabis generated $1.36 billion in retail sales and $284.3 million in taxes for Arizona during the 2023 calendar year. While a massive amount was wagered on sports betting that year – more than $6.5 billion – only $34.8 million in taxes were generated to flow into the state coffers.

Meanwhile, the burgeoning cannabis industry has also led multiple law firms to spin up cannabis law practices.

While the move by Trump “is a meaningful development for the industry,” it did not directly change the law, said Laura Bianchi, a Phoenix attorney at Bianchi Brandt and an expert in cannabis law.

“It doesn’t reduce regulatory requirements, mandate rescheduling, or federally legalize cannabis,” Bianchi said. “Any rescheduling still has to go through the DEA’s formal rule-making process.”

Arizona Dispensaries: Trump move is ‘profound cultural shift’

If the rescheduling does ultimately happen, it will have a significant impact on the cannabis industry. But just having it part of an executive order means a lot to many in the industry.

“This decision represents a profound cultural shift,” said Ann Torrez, the executive director of the Arizona Dispensaries Association. “For decades, marijuana has been stigmatized and now the federal government acknowledges what patients and providers have long understood – marijuana is medicine.”

Cannabis and marijuana have long histories and stigmas connected to the products. Many dispensary owners said they have had to work on making customers feel comfortable buying product in the open over the past several years.

Marie Saloum, the owner and CEO of GreenPharms Dispensary and Medical Marijuana Doctors, said this policy could lead to a bigger shift across the U.S.

“We’re not at the finish line yet, but moments like this help move cannabis out of the shadows and into everyday life, where education, research, and responsible access can continue to grow,” Saloum said.

Between farms and cultivation centers, packaging facilities and dispensaries, thousands of Arizonans work in the cannabis industry. Trump’s directive gives many of those employees validity in their daily work, said Jason Vedadi, CEO of Story Cannabis Dispensaries.

“By removing the Schedule I stigma, this action also grants dignity and legitimacy to more than 500,000 hardworking Americans employed in the legal cannabis industry, recognizing them as the normal, tax-paying citizens and job creators they have always been,” Vedadi said.

The legal cannabis industry is already one of the most scrutinized and heavily taxed industries in the U.S. The reclassification of the drug could create more financial freedom for companies in the industry, but might bring a larger microscope to specific companies, said Sara Gullickson, a cannabis licensing expert at the Cannabis Business Advisors.

“State licensing frameworks remain fully intact, and operators should expect heightened expectations around compliance, governance and operational discipline,” Gullickson said. “This move rewards well-run businesses with strong regulatory foundations and positions cannabis closer to a normalized, highly regulated industry – while exposing those that are unprepared for increased scrutiny.”