By Alanna Durkin and Gene Johnson, The Associated Press and Howard Stutz, The Nevada Independent

WASHINGTON (AP) — President Donald Trump's acting attorney general on Thursday signed an order reclassifying state-licensed medical marijuana as a less-dangerous drug, a major policy shift long sought by advocates who said cannabis should never have been treated like heroin by the federal government.

The order signed by Todd Blanche does not legalize marijuana for medical or recreational use under federal law. But it does change the way it's regulated, shifting licensed medical marijuana from Schedule I — reserved for drugs without medical use and with high potential for abuse — to the less strictly regulated Schedule III. It also gives licensed medical marijuana operators a major tax break and eases some barriers to researching cannabis.

The Trump administration also said it was jump-starting the process for reclassifying marijuana more broadly, setting a hearing to begin in late June.

Most states now allow medical or recreational consumption of marijuana; Nevada allows both. But it remains illegal at the federal level.

Riana Durrett, director of the UNLV Cannabis Policy Institute, had questions on how the language in the 33-page document could affect Nevada, given that the state has transitioned away from medical and adult recreational use licenses to one license that covers both areas.

She said it's unclear if the dual licenses can qualify for Drug Enforcement Administration (DEA) registration and tax relief.

The action largely legitimizes medical marijuana programs in the 40 states that have adopted them. It sets up an expedited system for state-licensed medical marijuana producers and distributors to register with the DEA.

The order clears cannabis researchers for obtaining state-licensed marijuana or marijuana-derived products for use in their work, and it grants state-licensed medical marijuana companies a windfall by allowing them, for the first time, to deduct business expenses on their federal taxes.

"I expect we won't know until the medical marijuana operators file for DEA registration," Durrett said in an email. "We won't know about the tax relief until the operators file their returns and receive a response from the IRS. If Nevada operators do qualify, it will be significant for them because the order encourages the Treasury to refund taxes retroactively."

Durrett said the overall takeaway was that state-licensed medical marijuana is now reclassified to Schedule III under the Controlled Substances Act. This allows state-licensed medical marijuana operators to register with the DEA and sell medical marijuana with the blessing of the federal government by following certain requirements in the order.

"This is a significant change as this activity, before today, was prohibited under Schedule I of the Controlled Substances Act, which is a serious federal crime," she said. "That would be a boost to the qualifying operators, many of which are financially struggling." 

Durrett added that the change would release Nevada marijuana growers from a tax penalty that prevents businesses from taking standard tax deductions. 

She added that the barriers to the research of cannabis would be removed.

Trump told his administration in December to work as quickly as possible to reclassify marijuana. On Saturday, as the Republican president signed an unrelated executive order about psychedelics, he seemed to express frustration that it was taking so long.

Blanche said Thursday that the Department of Justice was "delivering on President Trump's promise" to expand Americans' access to medical treatment options.

"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," he said in a statement.

Since 2015, Congress has prohibited the Justice Department from using its resources to shut down state-licensed medical marijuana systems. But the order nevertheless represents a major policy shift for the U.S. government, which has continued its longstanding marijuana prohibition — dating to the Marihuana Tax Act of 1937 — even as nearly all the states have approved cannabis use in some form.

Two dozen states plus Washington, D.C., have authorized adult recreational use of marijuana, 40 have medical marijuana systems, and eight others allow low-THC cannabis or CBD oil for medical use. Only Idaho and Kansas ban marijuana outright.

The regulation of medical marijuana has come a long way since California became the first state to adopt it in 1996, Blanche wrote.

"Today the vast majority of States maintain comprehensive licensing frameworks governing cultivation, processing, distribution, and dispensing of marijuana for medical purposes," Blanche wrote. "Taken as a whole, they demonstrate a sustained capacity to achieve the public-interest objectives ... including protecting public health and safety and preventing the diversion of controlled substances into illicit channels."

The president of the American Trade Association for Cannabis and Hemp, Michael Bronstein, called it "the most significant federal advancement in cannabis policy in over 50 years."

"This action recognizes what Americans have long known, cannabis is medicine," he said in a written statement.

Critic calls the order 'a tax break to Big Weed'

The Trump administration's decision drew derision from marijuana legalization opponent Kevin Sabet, the chief executive of Smart Approaches to Marijuana. Sabet said that while marijuana research is necessary, "there are many ways to increase our knowledge without giving a tax break to Big Weed and sending a confusing message about marijuana's harms to the American public."

"With this move, we are now confronted with the most pro-drug administration in our history," Sabet said in a text message. "Policy is now being dictated by marijuana CEOs, psychedelics investors, and podcasters in active addiction."

Marijuana or marijuana-derived products that are not distributed through a state medical marijuana program will continue to be classified in Schedule I.

Schedule III drugs are defined as having moderate to low potential for physical and psychological dependence. Some critics of the industry have suggested that legalization in the states has led to stronger and stronger cannabis products, which need to be researched rather than categorized less strictly than before.

The efforts to reclassify marijuana

The Justice Department under President Joe Biden, a Democrat, had proposed to reclassify marijuana, eliciting nearly 43,000 formal public comments. The DEA was still in the review process when Trump succeeded Biden, and Trump ordered that process to move along as quickly as legally possible.

Blanche's order sidestepped the review process by relying on a provision of federal law that allows the attorney general to determine the appropriate classification for drugs that the U.S. must regulate pursuant to an international treaty.

It was unclear how the order might affect operations in states where licensed recreational marijuana shops also sell to medical patients. In Washington state, which in 2012 became one of the first states to legalize the adult use of marijuana, 302 of 460 licensed stores have endorsements allowing them to sell tax-free cannabis products to registered patients.

Many Republicans oppose loosening marijuana restrictions. More than 20 Republican senators, several of them staunch Trump allies, signed a letter last year urging the president to keep the current standards.

Trump has made his crusade against other drugs, especially fentanyl, a feature of his second term, ordering U.S. military attacks on Venezuelan and other boats the administration insists are ferrying drugs. He signed another executive order declaring fentanyl a weapon of mass destruction.