Michael Stonebarger sorts young cannabis plants at a marijuana farm in Grandview, Mo., in 2022. President Trump set the process in motion to ease federal restrictions on marijuana. But his order doesn’t automatically revoke laws targeting marijuana, which remains illegal to transport over state lines.
Charlie Riedel/AP
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Charlie Riedel/AP
President Trump’s long-anticipated executive order to loosen U.S. restrictions on marijuana promises to bring immediate relief for cannabis businesses — but only in some respects. And although rescheduling it as a lower-risk drug is touted as opening a new era for cannabis research, experts say it’s not as simple as flipping a light switch.
“It’s hard to see the big headlines of, ‘Marijuana rescheduled to [Schedule] III; marijuana research will open,’” says Gillian Schauer, executive director of the nonpartisan Cannabis Regulators Association, which includes agencies from 46 states. “You know, those things are not true as of now.”
That’s because on its own, Trump’s Dec. 18 order isn’t enough to rewrite federal drug policy that has stood for more than 50 years.
“The Controlled Substances Act [of 1970] does not grant any president the authority to unilaterally reschedule a drug,” Schauer says. Such changes are historically made through either a rulemaking process, or an act of Congress.
Many details will shape how the administration enacts Trump’s order, affecting the timeline and scope for easing marijuana restrictions. But when it does happen, rescheduling won’t automatically revoke federal laws targeting marijuana, and interstate marijuana commerce would remain illegal, Schauer says.
It’s not yet known how other policies might change.
“We don’t know what will happen to federal drug testing requirements,” Schauer says, until agencies issue guidance.
Here’s a rundown of other key questions raised by the rescheduling order:
The time frame depends on which path the DOJ takes
Trump’s order directs Attorney General Pam Bondi to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III” of the Controlled Substances Act “in the most expeditious manner in accordance with Federal law … “
The directive evokes the process that started under former President Joe Biden. Under his administration, both the Department of Health and Human Services and the Justice Department advanced a proposal to reclassify pot from Schedule I, meaning it has no medical use and a high potential for abuse, to the lower-risk Schedule III, which includes ketamine, Tylenol with codeine, and anabolic steroids.
The Trump administration could resume the process that was already underway under Biden. But the new executive order’s mention of the Controlled Substances Act’s Section 811 hints at a potential shortcut.
“That allows the attorney general to move a drug to whatever schedule they deem is best, without going through the usual steps that are needed to reschedule a drug,” Schauer says.
The streamlined process was meant to ensure the U.S. can do things such as complying with international drug treaty obligations. But a historic precedent also links it to cannabis: In 2018, it was used to schedule the CBD epilepsy drug Epidiolex, months after it became the first U.S.-authorized purified medicine derived from marijuana. The drug was placed in Schedule V, the least restrictive schedule.
President Trump displays an executive order reclassifying marijuana as a less dangerous drug in the Oval Office on Dec. 18.
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Evan Vucci/AP
Will the DOJ call for public comment?
The Trump administration’s approach to administrative hearings and public comment periods would also help determine the pace of rescheduling.
“I would anticipate, if they use that [expedited] option, that we would not see a comment period,” shortening the process, Schauer explains.
But rescheduling could take longer if the Justice Department follows the traditional, and lengthy, notice-and-comment process.
Again, Bondi has options that could speed things up. She could choose to issue a final rule after a public comment period, for instance, or do so without a comment period.
“Some of the calculation for that may be on the legal end,” Schauer says. Noting that some anti-marijuana groups are vowing to file legal challenges to block rescheduling, she adds that the DOJ will likely have to balance Trump’s call for expedience with the need to defend its actions in court.
If the rule is published for comment, interest would likely be intense: In 2024, the DEA’s earlier proposed rescheduling rule for marijuana attracted more than 43,000 comments.
Cannabis firms would get tax relief, but credit cards remain forbidden
Sam Brill, CEO of Ascend Wellness Holdings, a multistate dispensary company, says rescheduling could bring a cascade of positive changes to his industry. But one benefit could come immediately, he says.
“The biggest thing that happens overnight is the 280E, the restrictive punitive tax code that is set on us,” would no longer apply to marijuana businesses, he says.
Like other businesses, Brill’s company is obligated to pay taxes on income. But because their core product is a Schedule I drug, the IRS says that under Internal Revenue Code Section 280E, they’re blocked from claiming common tax deductions, exposing them to a higher effective tax rate.
Section 280E “does not allow us to basically deduct normal expenses that everyone else can deduct,” Brill says. “I can’t deduct the rent for my stores, the cost of my employees in those stores, my interest expense.”
Brill says that some cannabis companies, including his, say 280E should not apply to them — but the IRS disagrees. As a result, Brill says, his company sets aside a large reserve fund in case the IRS comes after them.
“For 2024 alone, the value of this reserve” was about $38 million, Brill says, “which includes interest and penalties.”
Brill hopes marijuana’s changing status might also eventually lead to other restrictions falling, especially the inability of cannabis operations to accept credit cards. Most financial institutions refuse to provide basic banking services to state-authorized marijuana businesses, due to potential liability.
“The lack of the use of a credit card is really one of the biggest challenges for customers,” he says. Citing the importance of payday, Brill says: “For us, Friday by far is the biggest day every single week because this is a cash business.”
Medical research
Scientists welcomed news in 2023 that the Biden administration was moving toward reclassifying marijuana, and Trump says his move will boost medical research. But both then and now, there are caveats.
One benefit of the new rules is that they wouldn’t require marijuana researchers to go through the onerous process of obtaining a Schedule I license, and they would also ease rigorous laboratory regulations.
“You have very stringent requirements, for example, for storage and security and reporting all of these things,” neuroscientist Staci Gruber, of McLean Hospital in Massachusetts and Harvard Medical School, told NPR last year.
But another obstacle promises to be more stubborn: finding marijuana to study. The U.S. requires researchers to obtain marijuana from a handful of sources, which is itself an improvement over decades in which they were compelled to use one facility based at the University of Mississippi.
And, as Schauer notes, federal rules about sourcing marijuana have been decided separately from the controlled substances schedule.
“This does a little to make research easier,” Schauer says of the current rescheduling effort. “But there’s a lot that will still be challenging in researching cannabis unless we see a lot of agency policies change and adjust.”
