President Trump Accelerates Marijuana Rescheduling and Expands Access to CBD

In a major shift in federal drug policy, President Donald Trump signed an executive order (EO), directing the attorney general to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA).

While this change does not legalize cannabis federally, it will, once finalized, significantly ease research barriers and could lay the groundwork for expanded patient access and state–federal alignment. The EO, titled “Increasing Medical Marijuana and Cannabidiol Research,” also directs new federal initiatives related to Medicare access to CBD, data collection and research.

OVERVIEW

On Dec. 18, 2025, President Trump signed the executive order to reschedule marijuana from its current Schedule I, which implies high potential for abuse and no currently accepted medical use, to Schedule III, acknowledging lower potential for abuse and acceptable medical use. The process was formally initiated in 2022, when then-President Biden directed the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) to conduct a full scientific and legal review.

HHS issued its formal recommendation to reschedule marijuana in August 2023. Both the Biden and Trump era actions reflect growing recognition of marijuana’s medical uses, including as an alternative to opioids. This EO follows months of internal debate and escalating speculation around President Trump’s support of patient access and scientific research in the cannabis space. In addition to rescheduling marijuana, the order also launches a Medicare pilot to expand access to hemp-derived CBD products and prioritizes federal research and real-world data collection on cannabis use.

KEY COMPONENTS OF THE ORDER

• Marijuana Rescheduling: Directs the attorney general to reschedule marijuana to Schedule III under the CSA, a process that is typically carried out through DEA rulemaking, citing its medical use in treating chronic pain, nausea and other conditions.
• Medicare CBD Pilot: Establishes a Centers for Medicare & Medicaid Services (CMS) Innovation Center model allowing Medicare beneficiaries to receive up to $500 annually in hemp-derived CBD products, when recommended by a physician, beginning in early 2026.
• Federal Data Collection and Research: Requires CMS to collect and publicly report outcome data on Medicare beneficiaries who receive CBD under the pilot. Directs the National Institute on Drug Abuse (NIDA) to accelerate research on both the benefits and risks of cannabis and cannabinoids.
• HHS Research Framework: Directs HHS to develop research methods and real-world evidence models to inform standards of care and improve access to hemp-derived cannabinoid products in accordance with federal law.
• Legislative Request on CBD Regulation: Urges Congress to clarify the federal definition of hemp-derived cannabinoids and ensure safe access to CBD products for seniors.

FRAMING FROM THE ANNOUNCEMENT

President Trump framed the move as a “common-sense change” in service of patients and science, emphasizing the need to “break the stigma” around marijuana and advance alternatives to opioids. He cited stories from veterans, seniors and even personal friends who benefit from cannabis and said the EO expands patient choice to alternative treatment options.

After the president’s remarks, CMS Administrator Mehmet Oz described the new Medicare CBD model as a step toward standardized access and safer consumer use. HHS Secretary Robert F. Kennedy Jr., several physicians and a representative from the American Legion also spoke in support of the order, emphasizing its impact on chronic pain, PTSD, veterans’ care and other conditions.

WHAT’S NEXT

The EO directs the attorney general to initiate rescheduling, and we believe that President Trump will expect that to occur as quickly as possible. The attorney general has the authority under the CSA to follow an accelerated process in certain limited circumstances, but the traditional CSA route is for the DEA to initiate a federal rulemaking process.  Under this process, DEA would publish the rescheduling rule in the Federal Register, receive public input, incorporate that input, send the final rule to the Office of Management and Budget (OMB) for approval, and OMB would issue the final rule. It would become effective thereafter unless Congress chose to intervene under the Congressional Review Act (CRA).

INDUSTRY AND POLICY

Rescheduling cannabis to Schedule III would eliminate the harsh tax restrictions under Section 280E, allowing businesses to deduct normal operating expenses and significantly improve profitability. However, Congress may seek to replace 280E with a federal excise tax to maintain revenue streams, creating uncertainty around future tax burdens.

At the same time, banking reform remains critical. Without the Secure and Fair Enforcement (SAFE) Banking Act, the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act or similar legislation, cannabis companies will continue facing limited access to banking and lending services and will remain ineligible for listing on major U.S. stock exchanges.

Broader reforms will likewise be necessary to legalize cannabis nationally, as the state patchwork of cannabis laws, both medical and adult use, will remain. Overall, these changes signal a shift toward a more regulated, mainstream market, but businesses must prepare for evolving tax structures, advocate for banking access and prepare for further administrative action as the DOJ seeks to finalize the rescheduling process.

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This document is intended to provide you with general information regarding President Trump’s EO rescheduling cannabis. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.