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Marijuana reclassified federally, bringing major changes to Illinois cannabis industry
Cannabis has been moved to a less restrictive federal category, a historic shift expected to expand research and growth for Illinois businesses while it remains illegal at the federal level.
CHICAGO - A major shift in federal marijuana policy could have a big impact on Illinois’ cannabis industry.
The Trump administration has reclassified marijuana from a Schedule I drug to Schedule III, allowing for expanded medical research.
Local companies say the move also brings significant tax relief, potentially saving tens of millions of dollars. Industry leaders now hope Illinois can lead the way for neighboring states without medical cannabis programs.
What we know:
The reclassification moves marijuana out of the same category as heroin and LSD and into a less restrictive classification alongside drugs like ketamine and steroids.
While the biggest changes impact medical marijuana rather than recreational marijuana, experts say increased research could also influence recreational use over time.
Companies operating in Illinois say the shift is already making a difference.
Verano, with Chicago-area dispensaries like Zen Leaf, say the change allows them to avoid a federal tax rule known as 280E, at least on the medical side of their business. That rule previously prevented cannabis companies from writing off normal business expenses.
Without that burden, companies say they could keep significantly more revenue, potentially tens of millions of dollars, to reinvest in their operations.
That could mean new facilities, more hiring, and expansion into states that do not yet have medical marijuana programs.
What they're saying:
"Immediate effect on medical sales is we will now not be subject to 280E on the medical portion of our business, which is, again, a momentous shift in our business. We’ll now be treated no differently than a normal business on the medical component of our sales. So it really helps us, again grow our company, grow our patient count, our employee count. It’s fantastic for us," said George Archos, CEO of Verano.
Archos said Verano is already seeing the impact.
"We don’t waste time here. We’re very excited. We’ve been at someone anticipating this. There’s been a lot of talk. Obviously you saw that, you know, the president did last year, his announcements. You know, he’s the first president to really take charge here and put something in place that others have talked about, but he actually made the action. So again, we really want to put a big shout out and a thank you to President Trump for doing this for the benefit of so many people," Archos said.
Archos said this is the biggest step in more than a decade, and there's more to come.
"You know, you have to walk before you can run. And this is the first time we’ve taken a big step. So right now we’re very happy about what’s happened and what’s going to continue to happen throughout the year. We have the ALJ hearing in the summer, and I believe there’s so many more positive things will occur, but this was a big step and we’re happy again with what Mr. Trump has done to make this happen. The president was outstanding in the face of a lot of negative naysayers. He moved forward for the benefit of all Americans and for that we’re extremely grateful," Archos said.
The company says the change will also allow for research to back up what patients have long reported about cannabis’ benefits.
What's next:
Marijuana remains illegal at the federal level, and this reclassification is not the final step.
The federal government is expected to go through additional review, including a formal administrative hearing process, before any broader changes are finalized.
Industry leaders say this is just the beginning, and hope Illinois can help lead the Midwest as policies continue to evolve.