Colorado cannabis industry supporters, including Gov. Jared Polis, applauded the news on Tuesday that the U.S. Department of Justice will recommend that the drug be reclassified. But opponents expressed concern the move would make marijuana more readily available to children, and that potency of the drug will continue to escalate. 

It would be the biggest shift in federal cannabis policy in more than 40 years. 

The DOJ, which oversees the Drug Enforcement Administration, recommended that cannabis be classified as a so-called schedule three drug — with a moderate to low potential for physical and psychological dependence — instead of schedule one, which is reserved for drugs with a high potential for abuse and no medical benefits. Other Schedule I drugs include heroin and LSD.

"This is a huge deal for the regulated industry in Colorado, and every state where it's legal," said Marijuana Industry Group (MIG) Executive Director Truman Bradley, adding: "I don't think today's announcement happens without Colorado. We were the first state to legalize it and to say the eyes of the nation were on this state is not an understatement."

Meanwhile, two advocacy groups immediately raised worries about possible increased exposure of the drug to children. 

"After dealing with the unintended consequences that marijuana legalization has had in select states for over 10 years, we are monitoring today's announcement and what it will mean with the hopes the FDA becomes laser-focused on its role on this issue when it comes to public health and safety and protecting our nation’s young people," said Diane Carlson, co-founder and national policy director of One Chance to Grow Up, in a statement.

Colorado voters passed Amendment 64 on Nov. 6, 2012, approving the sale of recreational marijuana, making Colorado the first state in the nation to legalize pot sales. Those sales started Jan. 1, 2014. In that decade, dispensaries have sold $15.74 billion worth of cannabis through February, and the state has collected almost $2.68 billion in taxes through March, according to the Colorado Department of Revenue.  

“I am thrilled by the Biden Administration’s decision to begin the process of finally rescheduling cannabis, following the lead of Colorado and 37 other states that have already legalized it for medical or adult use, correcting decades of outdated federal policy," Polis said in a statement. "This action is good for Colorado businesses and our economy, it will improve public safety, and will support a more just and equitable system for all."

The industry has seen sales slide since pandemic-level highs. MIG's Truman said that the industry has a hard time weathering downturns when the IRS won't let businesses deduct the normal business tax deductions because cannabis is still illegal federally. And banks can't lend to them either, so capital has been hard to come by, he said.

"Colorado lost 10,000 plant-touching jobs in 2022, and another 6,000 in 2023," he said. "The unfair tax burden has made it very difficult to weather downturns. ... We think you're going to see capital markets open up." 

Industry stocks spiked on the news Tuesday. 

"No one is really celebrating until the rescheduling happens," Truman said. "We understand that legalization is an iterative process...It never made sense for marijuana to be treated the same as heroin. Marijuana has clear medical benefits and numerous studies have shown that marijuana is not prone to abuse."

MIG is the largest trade association for the regulated cannabis industry in Colorado. 

A Schedule III controlled substance is still illegal, and prescriptions are required to get things like Tylenol with codeine and ketamine — other drugs with the same classification. 

Luke Niforatos, executive vice president of advocacy organization Smart Approaches to Marijuana (SAM), said the Biden Administration is "doubling down on marijuana remaining illegal." 

"The entire industry is still illegal," Niforatos said. "It's completely out of compliance as a Schedule III, just like it should be as a Schedule I. So, there is a silver lining. We still oppose the decision." 

The group believes the industry targets children with products, such as edibles and gummies, and business names like Cookies, a dispensary in Denver. 

"They are widely targeting kids," he said.

The group, which aims to "prevent another big tobacco," also warned about the increasing potency of today's marijuana products. 

The cannabis industry welcomed the development.

“This is a remarkable about-face by the DEA, which spent decades denying the true medical value of the cannabis plant,” said Brian Vicente, founding partner of national cannabis law firm Vicente LLP. The group helped then-Gov. John Hickenlooper draft regulations for Colorado's new industry in 2012-14.

The firm has advocated for removing cannabis from Schedule I, according to a news release.

Reuters contributed to this report.