Pathways to Federal Cannabis Legalization in the United States: A 2025 Perspective

Cannabis legalization has been a topic of significant debate and transformation in the United States over the past decade. As of 2025, a majority of states have legalized cannabis in some form, either for medical or recreational use. However, federal legalization remains elusive, with cannabis classified as a Schedule I substance under the Controlled Substances Act (CSA). This classification creates a patchwork of state laws and federal restrictions that complicate commerce, research, and consumer access. This article explores the various courses the United States could take to achieve federal cannabis legalization, focusing on the current initiatives, pending changes, and the broader implications for the cannabis industry and society.

Current Status of Cannabis Legislation

State-Level Legalization

As of 2025:

• 24 states have legalized recreational cannabis.
• 38 states allow medical cannabis use.
• Several others have decriminalized possession or implemented limited medical cannabis programs.

This state-by-state approach has led to a thriving but fragmented cannabis industry, with states like California, Ohio, Michigan, Pennsylvania, and Colorado serving as pioneers in regulatory frameworks.

Federal Prohibition

Despite state progress, cannabis remains illegal at the federal level under the CSA. This classification:

• Restricts interstate commerce.
• Impedes research due to regulatory hurdles.
• Subjects businesses to punitive tax policies under Section 280E of the Internal Revenue Code.

Pathways to Federal Legalization

1. Legislative Action

Cannabis Administration and Opportunity Act (CAOA)

The CAOA, spearheaded by Senate Majority Leader Chuck Schumer, aims to remove cannabis from the CSA entirely. Key provisions include:

• Descheduling Cannabis: Eliminates federal prohibition, allowing states to regulate cannabis independently.
• Taxation and Revenue Allocation: Imposes a federal excise tax on cannabis sales, with revenue directed toward community reinvestment and public health initiatives.
• Social Equity Programs: Prioritizes licensing and funding for individuals and communities disproportionately affected by the War on Drugs.

States Reform Act (SRA)

Proposed by Republican lawmakers, the SRA takes a more conservative approach by:

• Rescheduling Cannabis to Schedule III: Reducing restrictions while maintaining federal oversight.
• Preserving State Autonomy: Ensures states can opt out of legalization without federal interference.
• Reducing Regulatory Burdens: Simplifies compliance for cannabis businesses.

MORE Act

The Marijuana Opportunity Reinvestment and Expungement (MORE) Act focuses on:

• Descheduling Cannabis: Similar to the CAOA.
• Expunging Records: Mandates expungement of federal cannabis-related convictions.
• Revenue Allocation: Funds community programs through a federal cannabis tax.

2. Executive Action

Rescheduling or Descheduling

The Biden Administration has signaled openness to rescheduling cannabis. The Department of Health and Human Services (HHS) recommended in 2024 that cannabis be reclassified as a Schedule III substance. If implemented by the DEA, this move could:

• Ease research restrictions.
• Alleviate tax burdens under Section 280E.
• Normalize banking and financial services.

Clemency and Pardons

Executive clemency could address the criminal justice impact of cannabis prohibition by:

• Pardoning individuals with federal cannabis-related offenses.
• Encouraging states to follow suit with expungement initiatives.

3. Judicial Action

Lawsuits challenging federal cannabis prohibition could force the courts to address the constitutionality of the CSA’s classification of cannabis. Legal arguments focus on:

• Commerce Clause Violations: Restricting interstate commerce in cannabis may infringe on states’ rights.
• Equal Protection: Federal prohibition disproportionately impacts communities of color.

4. International Pressure

Global cannabis reform could influence U.S. policy. Countries like Canada, Germany, and Uruguay have fully legalized cannabis, creating pressure for the U.S. to align with international trends.

• Trade Agreements: Legalization could facilitate cannabis trade under agreements like USMCA.
• Global Leadership: Aligning with international norms could enhance the U.S.’s role in global cannabis regulation.

Challenges to Federal Legalization

Political Division

• Bipartisan Divide: Republicans and Democrats differ on approaches to cannabis legalization, with concerns over public health and criminal justice reform creating friction.
• State Opposition: States with restrictive cannabis laws may resist federal legalization.

Regulatory Complexity

• Transition Periods: Moving from prohibition to regulation requires coordination between federal and state agencies.
• Taxation Policies: Balancing federal and state taxes to avoid overburdening consumers and businesses.

Industry Concerns

• Market Consolidation: Federal legalization could favor large corporations, squeezing out small businesses.
• Compliance Costs: Adapting to new federal regulations may strain resources for smaller operators.

Opportunities of Federal Legalization

Economic Growth

• Market Expansion: A federally legalized market could exceed $40 billion annually.
• Job Creation: Legalization could create hundreds of thousands of jobs in cultivation, manufacturing, retail, and ancillary services.

Public Health Benefits

• Standardized Testing: Federal oversight could ensure consistent quality and safety standards.
• Access to Medicine: Patients nationwide would benefit from expanded access to medical cannabis.

Social Equity

• Restorative Justice: Expunging records and reinvesting in affected communities could address historical injustices.
• Equitable Licensing: Federal programs could prioritize equity in licensing and funding.

Steps Toward Federal Legalization in 2025

Building Bipartisan Support

• Education Campaigns: Informing lawmakers about the economic, social, and health benefits of legalization.
• Coalition Building: Collaborating with industry stakeholders, advocacy groups, and public health organizations.

Incremental Progress

• Rescheduling: Achieving Schedule III status as a stepping stone to full legalization.
• Banking Reform: Passing legislation like the SAFE Banking Act to address financial barriers.

Advocacy and Public Engagement

• Grassroots Movements: Mobilizing public support through campaigns and petitions.
• Stakeholder Collaboration: Engaging businesses, researchers, and healthcare providers in policy discussions.

Conclusion

Federal cannabis legalization in the United States is within reach, but the path forward requires navigating complex political, economic, and social challenges. By leveraging legislative, executive, judicial, and international avenues, the U.S. can create a comprehensive framework that benefits businesses, consumers, and society as a whole. As the landscape evolves, continued advocacy and informed policymaking will be crucial to achieving this transformative goal.