It finally happened. After weeks of rumors and speculation, President Donald Trump signed an executive order on Dec. 18, ordering his attorney general to expedite the process of moving cannabis to Schedule III from Schedule I under the Controlled Substances Act.
“The facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered,” said Trump during the live-streamed executive order signing event. “This reclassification order will make it far easier to conduct marijuana related medical research, allowing us to study benefits, potential dangers, and future treatments. It’s going to have a tremendously positive impact.”
President Joe Biden first announced his intention to reschedule cannabis last year. Attorney General Merrick Garland published a proposed rule in May 2024 that would have moved cannabis to Schedule III. That process required a public comment period which drew about 43,000 comments. Subsequently, an administrative hearing was scheduled for the rule that never actually took place. By the time the Trump administration started earlier this year, the administrative hearing process was paused by the Drug Enforcement Administration.
Trump’s order calls for the process to start up again in an expedited fashion that could skip the pending administrative hearing.
Won’t legalize, but offers tax relief
This shift does not legalize cannabis or permit how it is legalized in more than 40 states and U.S. territories for medical or adult use.
But it would remove regulatory barriers that made it difficult to research cannabis and cannabinoids. It would also remove 280e tax restrictions, which bar companies from deducting business expenses from their taxes if that business is involved with an illegal Schedule I or II drug.
“We have people begging for me to do this. People that are in great pain,” said Trump. “For decades this action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems, and more including numerous veterans with service-related injuries and older Americans who live with chronic medical problems that severely degrade their quality of life.”
Trump, Health and Human Services Secretary Robert F. Kennedy, Jr., and other federal officials and researchers emphasized the order would open up research to test for safe doses of cannabinoids and create better drug-abuse preventions.
Kennedy said because of a lack of federal studies, much of the available evidence is anecdotal and hypothetical. “This will finally allow us to study this issue and answer these questions for the American people,” he said.
Hemp-THC ban review, Medicare CBD coverage
Trump also called on Congress to reexamine its recently passed ban on hemp-derived cannabinoid (HDC) products. Last month, Trump signed a budget bill to reopen the government that included a provision to reclassify legal hemp from the 2018 Farm Bill to contain no more than 0.3% of any type of THC and prohibit more than 0.4 milligrams of THC or synthetic cannabinoids in HDC products. With a one-year moratorium, this bans intoxicating hemp effective Nov. 12, 2026. But it also effectively bans CBD products, which are often used for pain management, because they typically contain a nonintoxicating amount of THC.
Along with the call on Congress, Trump said that Medicare would begin covering the cost of CBD for seniors. That coverage is supposed to go into effect early next year, according to Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services.
“Today our innovation center at CMS is announcing a new model and additional actions to give seniors access to cannabinoids. These are CBDs,” said Oz. “The innovation center models are going to allow millions of Americans on Medicare to become eligible to receive CBD as early as April of next year and at no charge if their doctors recommend them.”
Broad support, but lawsuits loom
Trump said he received overwhelming support to reclassify marijuana.
“I think I received the most phone calls on this, on doing what we’re doing,” he said. “I don’t think I received any calls from the other side of it.”
The rule has yet to be published in the Federal Register as of the morning of Dec. 19, and it still remains unclear exactly how the order will speed up or change the ongoing rescheduling process.
Yet, the president’s action is largely celebrated by the cannabis industry, who see it as a move in the right direction, even if the impacts are not immediately felt.
“President Trump first endorsed reclassifying cannabis in September of 2024, citing a desire for more research to unlock medical uses of cannabis,” said Saphira Galoob, CEO of the U.S. Cannabis Roundtable. “Now he is delivering. The shift underway is smart policy, backed by science, and overwhelmingly popular.”
Peter Sack, CEO Chicago Atlantic BDC, said that rescheduling would likely increase the availability of financing for cannabis companies.
“I think it is unambiguously a tremendous step forward for the industry. We’ve invested more than $2.5 billion across the industry both to small entrepreneurs and also big multi-state operators. This executive order and the eventual implementation of rescheduling it, I think it helps industry operators big and small,” he said. “It lessens the tax burden, it opens up channels for research, and I think, more generally, it furthers the normalization of a product that helps millions of people.”
Among the reactions to the order, prohibitionist group Smart Approaches to Marijuana condemned the move and vowed to challenge rescheduling in court.
“We have retained Torridon Law and Bill Barr, former Attorney General of the United States, to file a lawsuit against the administration if this rule should become final. We are confident that reason and science will win,” said SAM President Kevin Sabet in a statement. “We are filing a petition with the federal government to reschedule marijuana back to Schedule I via the normal public petitioning process.”
While there are many more reforms that the cannabis industry is calling for, Sack said this was clearly a positive development.
“Whether it’s going to take one month, three months, six months or 12 months, I don’t know. But regardless, this is a great first step and a necessary step because it sends a message to the entire administration that this is the policy of the President of the United States, and that anyone across the administration that is obstructing it is obstructing the will of the president. There’s no more doubt about where he stands on the topic of rescheduling.”
