Executive Order on Cannabis Rescheduling: What It Means for the Industry

Today,  the President signed an Executive Order to expedite the rescheduling of marijuana from Schedule I to Schedule III under the Controlled Substances Act (INCREASING MEDICAL MARIJUANA AND CANNABIDIOL RESEARCH – The White House). While significant, this order does not immediately change marijuana's legal status.

The order directs the Attorney General to complete the pending rulemaking to reschedule marijuana to Schedule III "in the most expeditious manner." This process has been underway since May 2024, when the Biden administration found that marijuana has accepted medical uses. 

What This Means for The Industry

The order does not change marijuana's current Schedule I status until the administrative process results in a final rule.  Despite the direction to do this "expeditiously," the final rule will likely face delays from opponents, and the actual wording of the final rule will determine just how impactful this order will be.

However, assuming the administrative process concludes and marijuana moves to Schedule III, the biggest effect would be that cannabis businesses should no longer be subject to onerous Section 280E tax penalties, thereby freeing up operating cash and capital for investment and potentially fueling another round of mergers and acquisitions.  Again, the actual language of the final rule may limit the applicability and extent of this change.

Other effects of rescheduling should be reduced research barriers and possible Medicare/Medicaid coverage for certain CBD therapies.  All of this remains to be determined, however.

This is historic news no doubt and another step in the right direction.  Cannabis businesses should begin strategizing now for how to best position themselves when the final rule is published.

Book a free consult today and make sure YOU are prepared.

This blog post is for informational purposes only and does not constitute legal advice.