The U.S. Department of Health and Human Services (HHS) has recommended easing restrictions on marijuana and reclassifying it as a Schedule III drug, according to Bloomberg News. Currently classified as a Schedule I drug, marijuana is deemed to have a high risk of abuse and no medical uses. The HHS recommendation comes as a result of a yearlong review initiated by President Joe Biden.

The HHS letter, written by Assistant Secretary of Health Rachel Levine and addressed to the Drug Enforcement Agency (DEA), states that the recommendation is based on a scientific and medical evaluation conducted by the Food and Drug Administration. The DEA has the final authority to schedule or reschedule a drug under the Controlled Substances Act and will now initiate its own review.

The move to reclassify marijuana has been welcomed by cannabis firms, with shares of companies like Verano Holdings, Canopy Growth, Tilray Brands, and Cronos Group rising. Many advocates and industry leaders believe the reclassification could mark a significant federal reform in the cannabis industry and signal an end to the failed War on Drugs.

While about 40 U.S. states have legalized marijuana use to some extent, it remains illegal at the federal level and in some states. The HHS recommendation could potentially lead to a shift in federal drug policy and change the landscape of the marijuana industry in the United States.