President Trump suggested he'll loosen federal restrictions on marijuana use, something many Democrats and advocates have been pushing to happen for years.

Why it matters: Marijuana's reclassification would not only be one of Trump's most popular policy decisions yet, but it would likely eliminate the gray area long surrounding cannabis businesses and banks.

• Marijuana currently faces the same restrictions as heroin. Trump's potential reclassification would deem it as a less dangerous drug — on par with steroids.

Driving the news: Under Trump's new plan, which was first reported by the Washington Post, the president would reclassify marijuana, which is banned under federal law.

• Not only would reclassification ease regulations, but it would make it easier to conduct medical research and possibly create tax breaks for cannabis companies.
• Cannabis stocks surged in wake of Trump's potential shift.
• The change comes after the World Health Organization recently added a formal name to a deadly cannabis-related condition, which was adopted by the Centers for Disease Control and Prevention.

In general, federal laws supersede state laws. But most agencies refer to state laws when it comes to marijuana use.

Read more below for how states and federal law work for marijuana.

How federal marijuana laws work

The federal Controlled Substances Act classifies marijuana as a "Schedule I controlled substance," meaning the drug has high abuse potential and it cannot be accepted for medical...

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