The rumors were true: Trump just signed an executive order rescheduling cannabis from a Schedule I to a Schedule III controlled substance.
This reclassification does not have any impact on the federal status of the plant. Despite today’s executive order, cannabis remains illegal on a federal level. But the new classification will make it easier for researchers to study the plant and finally allow cannabis businesses to take federal tax deductions.
Inside the order
The new executive order directs the attorney general to complete the process of rescheduling cannabis from a Schedule I to a Schedule III controlled substance.
It also addresses one aspect of the at-risk hemp industry, directing administration officials and Congress to ensure access to full-spectrum CBD products.
“This action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems and more,” said Trump at the signing.
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CBD Access Through Medicare
During the signing event, Dr. Oz, Administrator for the Centers for Medicare & Medicaid Services (CMS), spoke about a new proposal to include cannabidiol (CBD) access for seniors under Medicaid.
He spoke of CMS rolling out a new model to provide access to CBD for seniors, citing that many already use it to manage their chronic pain and cancer-related symptoms. According to Dr. Oz, the new model would allow up to $500 in access to hemp-derived CBD products for seniors who receive a recommendation from their doctor.
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What the order means
Again, the order does not legalize weed. It just reclassifies it from a Schedule I to a Schedule III controlled substance.
On the research front, this means that more studies can be conducted on the plant. Cannabis has historically been difficult to research due to its Schedule I classification, which greatly restricts the research that can take place.
“From an industry standpoint, this is long overdue. It is absolutely crazy to think that cannabis is in the same schedule as heroin and fentanyl for over 50 years and no president has acted to correct this wrong. This administration was willing to take decisive action, and that matters. Action speaks louder than words,” said Elad Kohen, CEO at The Flowery, a company that operates 22 retail locations across Florida and New York.
The Schedule I status makes cannabis one of the most tightly regulated drugs and marks it as having no accepted medical uses. The move to Schedule III recognizes that it has some medical uses and a lower potential for abuse.
For cannabis industry players, the new classification means much-awaited tax relief. Under Section 280E of the Internal Revenue Code, businesses dealing with Schedule I drugs cannot utilize tax write offs. With the new schedule in place, cannabis businesses can finally write off some of their expenses.
“With reclassification, we can finally take off the financial handcuffs,” said Angela Brown, founder and CEO of COAST Cannabis Co, the first licensed adult-use manufacturing company to operate in Massachusetts.
“From an industry standpoint, this is long overdue. It is absolutely crazy to think that cannabis is in the same schedule as heroin and fentanyl for over 50 years and no president has acted to correct this wrong. This administration was willing to take decisive action, and that matters. Action speaks louder than words,” said Elad Kohen, CEO at The Flowery, a company that operates 22 retail locations across Florida and New York.
The long-awaited move to reschedule cannabis comes after a false alarm in August, when the Trump administration signaled it was just weeks away from rescheduling the plant. In May of 2024, former President Biden announced a plan to reschedule the plant, too, after the Department of Health and Human Services recommended loosening restrictions.
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