What TRUMP’s marijuana rescheduling means for Michigan

Monday, December 22, 2025 -Trump’s recent executive order to move marijuana from Schedule I to Schedule III under federal law marks one of the most significant changes in U.S. cannabis policy in decades. 

The action formally recognizes cannabis as a drug with accepted medical use and a lower potential for abuse than previously classified substances like heroin and LSD — even though it does not legalize marijuana nationwide or override state laws.

For Michigan’s booming cannabis industry, the shift could be a game-changer. Under the current Schedule I classification, marijuana businesses cannot deduct ordinary business expenses on their federal taxes due to IRS Section 280E — often resulting in tax rates that are among the highest in any U.S. industry. 

Rescheduling to Schedule III would likely eliminate that restriction, meaning dispensaries, growers, and processors could deduct costs like rent, payroll, and marketing just like other businesses, dramatically improving profitability and cash flow.

The change also opens doors for expanded medical research, potentially unlocking federal funds and scientific studies into cannabis’ benefits and risks — something Michigan universities and medical professionals have long advocated for. 

However, key challenges remain: federal prohibition on recreational use persists, interstate transport of marijuana is still illegal, and many large banks may remain cautious about servicing cannabis companies without clearer legal protections.