(NEXSTAR) – The Justice Department took a major step this week, formally moving to reclassify marijuana as a less dangerous drug. The process isn’t finalized yet, but if approved, the plan would drop marijuana from a Schedule I drug to a Schedule III.

The Drug Enforcement Administration (DEA) classifies substances into five categories, denoted with Roman numerals, based on how likely they are to be abused. Schedule I drugs are those with the highest potential to create dependency issues and are considered to have “no currently accepted medical use.”

As it stands, marijuana is a Schedule I drug, along with heroin, LSD and ecstasy. The new rule under consideration would move it down two levels to Schedule III, below Schedule II drugs like cocaine, methamphetamine, fentanyl, oxycodone and others.

Other Schedule III drugs include ketamine, testosterone and Tylenol with codeine. Schedule IV drugs like Xanax, Valium and Ambien are considered even less risky, as are Schedule V drugs like cough medicine and several prescription medications.

What would change if marijuana is officially reclassified?

Rescheduling does not decriminalize marijuana or make it legal for recreational use on the federal level.

Even if marijuana is rescheduled, it would still be a controlled substance that’s subject to federal rules and regulations.

Instead, the change would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs. Becoming a Schedule III drug would make it easier for research to be done on marijuana as well.

It would also potentially cut the federal taxes that companies pay. Under the federal tax code, businesses involved in “trafficking” in marijuana or any other Schedule I or II drug can’t deduct rent, payroll or various other expenses that other businesses can write off. (Yes, at least some cannabis businesses, particularly state-licensed ones, do pay taxes to the federal government, despite its prohibition on marijuana.) Industry groups say the tax rate often ends up at 70% or more.

In tandem with the push for reclassification, President Joe Biden has also moved to pardon thousands of people convicted federally of simple possession of marijuana and has called on governors and local leaders to take similar steps to erase convictions.

“This is monumental,” Biden said in a video statement, calling it an important move toward reversing longstanding inequities. “Far too many lives have been upended because of a failed approach to marijuana, and I’m committed to righting those wrongs. You have my word on it.”

But the immediate effect of rescheduling on the nation’s criminal justice system is expected to be muted. Federal prosecutions for simple possession have been fairly rare in recent years.

Schedule III drugs are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution.

Nationwide, 38 states have already legalized medical marijuana while 24 have approved it for recreational use.

What happens next?

The process of reclassifying a substance is lengthy, and there are still more hurdles to clear. The plan has been approved by Attorney General Merrick Garland, and heads next to the DEA, which will take public comment on the proposal. After the 60-day comment period, there will be a review by an administrative judge.

The move started with a recommendation from the federal Health and Human Services Department, which launched a review of the drug’s status at the urging of President Biden in 2022.

But the DEA has not yet formed its own determination as to where marijuana should be scheduled, and it expects to learn more during the rulemaking process.

The Associated Press contributed to this report.