WASHINGTON, D.C.: The United States is preparing a sweeping shift in its approach to marijuana, with federal authorities set to relax restrictions and begin reclassifying the drug in a move expected to reshape a multibillion-dollar industry.

The U.S. Department of Justice said it would immediately loosen rules governing certain marijuana products and fast-track efforts to classify the drug as less dangerous. The change marks one of the most significant updates to U.S. drug policy in decades.

The move stops short of legalizing marijuana nationwide but is expected to have wide-ranging effects on the US$47 billion cannabis industry, which has long faced federal hurdles despite broad legalization at the state level.

Under the new approach, state-regulated medical marijuana products will be moved from the most restrictive category of drugs, alongside substances such as heroin, to a less tightly controlled classification that includes medications with a lower to moderate potential for abuse, such as certain painkillers, ketamine, and testosterone. Marijuana products approved by the U.S. Food and Drug Administration will also fall into this category.

Acting Attorney General Todd Blanche said the government would also accelerate a broader review that could lead to all uses of marijuana being reclassified.

"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 decision follows a December executive order from President Donald Trump directing the Justice Department to ease federal restrictions on cannabis.

Industry analysts say the changes could lower barriers to research, reduce tax burdens for businesses, and make it easier for companies to access financing, longstanding challenges for the sector under federal law.

Shares of major cannabis companies rose sharply after the announcement, with U.S.-listed stocks gaining between 6 percent and 13 percent. Firms expected to benefit include Canopy Growth, Tilray Brands, and Trulieve Cannabis.

"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, chairman and CEO of Tilray.

Marijuana has been classified as a Schedule I drug, defined as having a high potential for abuse and no accepted medical use, for decades, a designation widely criticized as outdated given the drug's expanding legal status across the country.

According to the Congressional Research Service, 24 states and the District of Columbia have legalized marijuana for recreational use. Forty states allow full medical use, while another eight permit limited medical applications. Only Idaho and Kansas prohibit marijuana entirely.

Legal cannabis sales in the United States are projected to exceed $47 billion in 2026, according to market research firm BDSA.

Marijuana remains the most widely used illicit drug in the country and globally. Data from the U.S. Centers for Disease Control and Prevention suggests nearly one in five Americans uses it annually. At the same time, millions have been arrested for possession even as regulated businesses continue to grow.

A similar reclassification effort was initiated under the Biden administration in 2024, but was not completed before Trump returned to office. The Drug Enforcement Administration subsequently scrapped that attempt.

The Justice Department said it will begin formal proceedings on June 29 to gather evidence and expert input as part of the reclassification process.