The U.S. Drug Enforcement Administration (DEA) is set to reclassify marijuana as a less dangerous drug, moving it from Schedule I to Schedule III, according to multiple sources familiar with the matter. This landmark decision, which is part of the Biden administration's plan to ease federal restrictions on cannabis, marks the first time in over 50 years that the U.S. government will acknowledge the potential medical benefits of marijuana and begin studying them in earnest.

The DEA's proposal, which is currently under review by the White House Office of Management and Budget (OMB), would recognize the medical uses of cannabis and acknowledge its lower potential for abuse compared to some of the nation's most dangerous drugs. However, it is important to note that this reclassification will not legalize marijuana outright for recreational use.

"The Justice Department continues to work on this rule," a Biden administration official stated, declining to provide further comment at this time.

Once the OMB approves the proposal, the DEA will open a public comment period on the plan to move marijuana from its current Schedule I classification, which includes drugs like heroin and LSD, to Schedule III, alongside substances such as ketamine and some anabolic steroids. This move follows a recommendation from the federal Health and Human Services Department and aligns with President Joe Biden's call for a review of federal marijuana law in October 2022.

The reclassification of marijuana is expected to have significant implications for the $34 billion cannabis industry. By acknowledging the drug's medical benefits, the move will open doors for pharmaceutical companies to become involved in the sale and distribution of medical marijuana in states where it is legal. Additionally, the reclassification will eliminate substantial tax burdens for cannabis businesses in these states, particularly by removing the Internal Revenue Services code Section 280E, which currently prohibits legal cannabis companies from deducting ordinary business expenses.

Jim Cole, former deputy attorney general in the Obama administration and current member of the National Cannabis Roundtable, stated in an interview that reclassifying marijuana to Schedule III would "open up the ability to actually test it and put it in a laboratory without all of the restrictive measures" of a Schedule I drug.

However, some critics argue that the decision to reclassify marijuana is the result of a politicized process and could have unintended consequences. Kevin Sabet, president and CEO of Smart Approaches to Marijuana and a former Obama Administration advisor, expressed concerns that the move could be "devastating for America's kids, who will be bombarded with attractive advertising and promotion of kid-friendly pot products."

Despite these concerns, the DEA's reclassification plan has garnered growing bipartisan support on Capitol Hill, largely driven by the electorate. A recent Pew Research poll revealed that nearly six in ten Americans believe marijuana should be legal for both medical and recreational purposes.

Congress is also considering its own measures to support the legal marijuana industry, such as the SAFER Banking Act, which would grant legal marijuana businesses access to traditional banking and financial services, and the HOPE Act, which would provide resources for states and local governments to automatically expunge criminal records for petty, non-violent cannabis offenses.