A Guide to Marijuana Legalization in the United States – The Motley Fool
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Marijuana use was legal for most of human history up to the early 20th century. Between 1916 and 1931, 29 U.S. states banned the use of marijuana. The Marihuana Tax Act of 1937 essentially made cannabis illegal across the U.S.
While cannabis remains illegal on the federal level, most U.S. states have legalized the use and sale of medical marijuana. An increasing number of states are also legalizing the plant for recreational use. Here's the lowdown on marijuana legalization in the U.S.
California, which legalized medical marijuana in 1996, was the first state to treat the legalization of marijuana as a state's right. Here is the long list of U.S. states, districts, and territories that have legalized either medical or recreational marijuana:
Federal marijuana laws and regulations apply to all states. The most important federal law relating to marijuana is the Controlled Substances Act, which regulates mind-altering substances.
As discussed earlier, individual states have significantly different marijuana laws. Some states allow the legal use of all types of marijuana. Others ban the use of marijuana entirely. Many states have a middle-of-the-road approach, allowing the use of medical marijuana but prohibiting the use of recreational marijuana.
Even in states where marijuana is legal, the details of how marijuana use is permitted can vary considerably. For example, states may have different limits on the amount of marijuana an individual can possess.
The benefits of legalizing marijuana include:
On the other hand, the negatives associated with legalizing marijuana include:
The legalization of marijuana has impacted U.S. healthcare systems in both positive and negative ways.
On the positive side, a study conducted by Leafwell that was published in the Applied Health Economics and Health Policy journal found that health insurance premiums declined in states that had legalized medical cannabis. One key factor behind the lower premiums is that cannabis users take fewer prescription drugs.
States with legal cannabis usage have also experienced declines in opioid-related deaths. Some patients with pain view cannabis as a replacement for opioid drugs such as oxycodone.
However, cannabis legalization has also negatively affected healthcare systems in other ways. States with legal recreational marijuana have experienced increased numbers of cannabis-related hospitalizations. The number of children poisoned by ingesting cannabis products has especially increased with the legalization of cannabis edibles.
Both medical and recreational marijuana use remains federally illegal, with the Controlled Substances Act of 1970 classifying cannabis as a Schedule I drug. Despite this classification, which is reserved for substances with no accepted medical use and a high potential for abuse, the medicinal benefits of marijuana are hard to dispute.
The U.S. Drug Enforcement Administration (DEA) published a proposed rule in May 2024 to reschedule cannabis to Schedule III (controlled substances with a moderate to low potential for abuse). In August 2025, President Donald Trump stated his openness to rescheduling marijuana. He followed up in December 2025 by issuing an executive order directing the U.S. attorney general to take the necessary steps to reschedule marijuana as a Schedule III substance.
More states could legalize medical and recreational marijuana in the coming years. As public support keeps increasing and the number of marijuana stocks rapidly proliferates, more states are considering the potential tax revenue benefits from cannabis sales.
Efforts have been made in Congress to enact major cannabis reform at the federal level. However, all proposed bills have stalled in the legislative process.
During the 2024 presidential campaign, Donald Trump indicated that he would support the rescheduling effort in his second term. Many cannabis proponents believe it is only a matter of time before marijuana becomes legal, or at least decriminalized, nationwide.