The US Department of Justice said on Thursday it would immediately loosen restrictions on some marijuana products and move quickly to reclassify the drug as less dangerous, in one of the biggest changes to US drug policy in decades.

The move does not legalize marijuana across the United States, but it is likely to reshape the $47 billion industry, which has faced continued barriers at the federal level, even as all but two US states have legalized it in some form for medical use and nearly half have legalized it for recreational use as well, reports Reuters.

State-regulated medical marijuana products now would be moved from a group of drugs classified as highly addictive, such as heroin, to a less restrictive category for products that have a low to moderate potential for abuse, including common painkillers, ketamine and testosterone. Marijuana products approved by the US Food and Drug Administration also would be moved to that category.

Acting Attorney General Todd Blanche said the US government would also fast-track a broader effort that would reclassify all uses of the psychoactive plant as less dangerous.

The measures are likely to lower barriers for research, ease tax burdens and make it easier for firms to ⁠secure funding.

“This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information," Blanche said in a statement.

The move follows a December executive order from President Donald Trump directing the Justice Department to loosen marijuana restrictions.

The measure is expected to boost the growing cannabis industry in the United States, benefiting companies like Canopy Growth WEED.TO, Tilray Brands , Trulieve Cannabis TRUL.CD.

In addition to selling medical marijuana and consumer-focused products with cannabis, some of these companies are also researching their pharmaceutical uses for pain management, cancer symptoms, anxiety and other disorders.

POT SHARES JUMP THEN REVERSE GAINS

US-listed shares of cannabis companies jumped between 6% and 13% following the decision, but later reversed their gains as investors reacted to the limited scope of the federal government`s immediate moves.

“Today marks a pivotal moment for the United States. With President Trump’s action to reschedule cannabis, federal policy is finally aligning with science, medicine, and most importantly, patient needs," said Irwin Simon, CEO of marijuana company Tilray Brands TLRY.TO.

Marijuana`s status as a Schedule I drug, meaning it has a high potential for abuse and no accepted medical use, has been widely criticized as anachronistic, particularly as it makes inroads at the state level.

Some 24 states and the District of Columbia have legalized it for recreational purposes, while 40 have fully legalized it for medical purposes and another eight allow some medical uses, according to the Congressional Research Service. Only two states - Idaho and Kansas - do not allow any legal use.

Legal sales are expected to top $47 billion in 2026, according to market researcher BDSA.

After Trump`s December order, the Centers for Medicare and Medicaid Services began allowing some eligible Medicare beneficiaries to use hemp-derived products, including cannabidiol (CBD) products, under clinician guidance.

On Thursday Trump said more must be done. In a Truth Social post, he called on Congress to update the law to ensure access to the "full-spectrum" of CBD products "while preserving Congress`s intent to restrict the sale of products that pose Health risks."

MARIJUANA IS MOST WIDELY USED ILLICIT DRUG

Marijuana is the most widely used illicit drug in the United States and the world. Nearly one in five US residents use it in a year, according to the US Centers for Disease Control and Prevention. Millions of Americans have been arrested for possession of the drug, even while growing businesses listed on stock exchanges sell cannabis-related products.

The Biden administration embarked on a similar move in 2024, but it was not finalized when Trump returned to office and the US Drug Enforcement Administration scrapped the effort.

The Justice Department said it will begin proceedings on June 29 to gather evidence and expert opinion on reclassifying the drug.

Marijuana skeptics have argued that legalization would lead to higher drug use by minors, lower workplace productivity and increased traffic safety hazards.

Dozens of Republicans in Congress objected in December when President Donald Trump ordered the Justice Department to loosen regulations. Reaction was more muted on Thursday, but Senator Tom Cotton, a Republican from Arkansas, said the moves would make it easier for Americans to use what he described as a still-dangerous drug.

"Marijuana today is much more potent than just ten or twenty years ago, leading to increased psychosis, anti-social behavior and fatal car crashes," Cotton said in a social media post. "A change to marijuana’s drug classification is a step in the wrong direction."