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 adult-use cannabis 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 adult-use is permitted in 24 states — including Arizona — and Washington, D.C. While the administration touted the medical research benefits of rescheduling, the medical and adult-use 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.
But business taxes do more than raise revenue – they also create incentives that shape how companies organize and operate. For legal marijuana businesses – both medical and adult-use dispensaries alike – rescheduling marijuana would relax these implicit restrictions, serving as a quiet form of deregulation that removes tax pressures that currently shape the industry's financing, structure and compliance. From this perspective, rescheduling would cut taxes but also remove one of the federal government's levers over an industry principally regulated by the states.
Read more at Phoenix New Times
