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On December 18, 2025, President Donald Trump issued an , Increasing Medical Marijuana and Cannabidiol Research, that directs the Attorney General in the most expeditious manner in accordance with federal law, to complete rulemaking process related to rescheduling marijuana to Schedule III classification under the federal Controlled Substances Act of 1910, 21 U.S.C. § 801 et seq. (CSA). The order—to be carried out consistent with existing law and available funding—impacts both “medical marijuana, which is primarily made up of two cannabinoids – cannabidiol (CBD) and tetrahydracannabinol (THC)” and “appropriate full-spectrum CBD products.” 

Background

Since 1970, Cannabis with a delta-9 tetrahydrocannabinol (THC) concentration exceeding 0.3 percent on a dry weight basis, has been classified as a Schedule I controlled substance under the federal Controlled Substances Act of 1910, 21 U.S.C. § 801 et seq. (CSA). Under the CSA, a Schedule I drug has “no currently accepted, safe medical use” and “a high potential for abuse.” ().  A Schedule III drug, however, has a lower potential for abuse, along with “a currently accepted medical use in treatment in the United States.” Under the CSA, it is federally illegal to grow, sell, possess, prescribe, and consume cannabis, with penalties for violations including imprisonment or the imposition of substantial fines.

As emphasized in President Trump’s Executive Order, a Schedule I drug or substance cannot be obtained through a prescription and use or possession can carry substantial criminal penalties; the nature of the classification preempts any recognized medical use.  A Schedule III drug or substance, however, can be obtained through a physician’s prescription and taken under medical direction.  As the Executive Order makes clear, federal agencies like the Food and Drug Administration (FDA) and Department of Health and Human Services (HHS), have signaled support for medical uses of marijuana. President Trump’s directives are supported by the , which found credible scientific support for marijuana’s medical use, and  align with from HHS to reschedule cannabis as having “a potential for abuse less than the drugs or other substances in Schedules I and II” and “a currently accepted medical use in the United States.”

Additionally, and perhaps surprisingly, the Executive Order addresses a recent conundrum regarding “hemp,” which, as defined under the CSA, is excluded from the definition of cannabis.  As written, the definition of cannabis under the CSA does not include hemp and is defined as cannabis containing a concentration of less than 0.3 percent THC concentration on a dry weight basis and products derived from hemp. 

The Agriculture Improvement Act of 2018, commonly known as the “Farm Bill”, legalized the production, sale, transport, and possession of hemp, creating a loophole that allowed for unregulated intoxicating hemp products to be sold across the country.  However, the signed in November 2025 revised the federal definition of hemp to a focus on “total THC” and THC-like effects, and functionally bans intoxicating hemp products beginning in November 2026.  Since the appropriations law went into effect, industry stakeholders have made efforts to convince legislators to impose federal regulations on their products, rather than banning them, but have yet to see success. The Executive Order addresses these stakeholder efforts—directing collaborative work for Congress to “update the statutory definition of final hemp-derived cannabinoid products to allow Americans to benefit from access to appropriate full-spectrum CBD products while preserving the Congress’s intent to restrict the sale of products that pose serious health risks.”  If heeded by Congress, this directive would curtail the otherwise blanket ban on intoxicating hemp products within the FY2026 Agriculture appropriations law.

What the Executive Order Does and Does Not Do

President Trump’s Executive Order, harkening back to his to reschedule marijuana, notably does not legalize marijuana recreationally or medically nationwide, nor does it actually reschedule marijuana. Instead, the Order mandates the Attorney General to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the CSA.” Additionally, Section 2(b) of the order calls on the Assistant to the President and Deputy Chief of Staff for Legislative, Political, and Public Affairs to collaborate with Congress to amend statutory definitions of final hemp derived cannabinoid products, as discussed above.

If marijuana is rescheduled—an effort to be borne by Congress’s amendment to the CSA—medical cannabis businesses may find themselves able to deduct a wider array of business expenses on federal tax filings, as Section 280E of the Internal Revenue Code would no longer apply.  Additionally, patients who obtain a valid prescription for medical marijuana will find shifts in access, as rescheduling under the Executive Order’s directive would allow for medical use of marijuana (i.e., Schedule III controlled substances may be dispensed by prescription) while maintaining federal criminal control over the substance pursuant to the CSA. As such, the Executive Order eases federal restrictions that boost the ability to conduct research on the effects of cannabis and encourages a regulatory schema that supports empirical evidence to close the “gap between current medical marijuana and CBD use and medical knowledge of risks and benefits, including for specific populations and conditions.”

Notably, the Executive Order did not speak to potential cost coverage that could arise with an increase in prescribed medical marijuana. While the Order directs the Centers for Medicare & Medicaid Services (CMS) Administrator to “develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products,” it did not address CMS’s November 28, 2025 , which noted that as of publication on November 28, 2025 “any cannabis product with a delta-9 THC content above the 0.3 percent threshold is still considered marijuana, remains a Schedule I controlled substance, and therefore is illegal under federal law and would be subject to CMS’s prohibition[.]”  As provided in President Trump’s Executive Order, medical marijuana products would remain ineligible for coverage under Medicare Advantage programs, provided that CMS’s proposed rule remains unchanged as a result, until Congress amends the CSA. 

Conclusion

While this Order directs the federal government to rapidly reschedule marijuana from Schedule I to Schedule III, expand and structure research on both medical marijuana and hemp‑derived CBD products, and work with Congress to create a clearer regulatory framework for CBD, including THC limits and product standards, its practical effects remain contingent on revisions to federal law. In practical terms, rescheduling could make medical marijuana research and product development easier, potentially leading to FDA‑approved treatments, more consistent prescribing guidance for doctors, and safer, better‑labeled products for patients. Tighter but clearer rules for hemp‑derived cannabinoids and CBD, such as defined THC caps and attention to CBD:THC ratios, may improve consumer safety while preserving access to beneficial full‑spectrum products.  The Executive Order is a shift in federal policy, moving from treating marijuana as having no medical use to formally recognizing its medical potential. The implications and scope of it remain uncertain and contingent on implementation.  Forthcoming applications of the Order’s directives could have ripple effects by allowing for federal banking of cannabis industry funds, industry access to US capital markets, as well as interstate commerce of products, all of which are now essentially prohibited.   It will also could be expected to provide the opportunity for a more standardized and regulated marijuana industry rather than the current hodge podge of widely varying state laws. 

�鶹ֱ��’s Cannabis Industry Team brings together almost 100 attorneys nationwide and in Mexico City with significant experience from multiple practice disciplines to comprehensively advise clients involved in the space as well as clients within supporting and peripheral industries.