Trump Order Reschedules Cannabis, Igniting Historic Industry Shift

CHICAGO, IL – December 18, 2025 – President Donald Trump signed an executive order today directing the federal government to expedite the rescheduling of cannabis, a move hailed as a watershed moment that promises to reshape the American cannabis industry. The action, which seeks to move cannabis from Schedule I to the less restrictive Schedule III of the Controlled Substances Act, has been celebrated by industry leaders as a long-overdue acknowledgment of the plant's medical value and a critical step toward economic normalization.

Charlie Bachtell, CEO of Chicago-based Cresco Labs, captured the industry's sentiment in a statement, calling the decision the “most consequential moment in the history of U.S. cannabis.” He added, “The decision to move cannabis from Schedule I to Schedule III will be a cultural turning point, acknowledging what millions of Americans already know: cannabis is medicine and deserves responsible, common-sense regulation.”

A Financial Revolution: Unshackling an Industry from Punitive Taxation

For years, the state-legal cannabis industry has operated under a crippling financial burden imposed by Section 280E of the federal tax code. As a Schedule I substance, cannabis businesses were barred from deducting standard business expenses—from payroll to rent to marketing—a restriction that does not apply to any other legal industry. This resulted in staggering effective tax rates, often exceeding 60% of gross revenue, which severely limited profitability, stifled growth, and made it nearly impossible to compete on a level playing field.

The reclassification to Schedule III would immediately render Section 280E inapplicable to cannabis operators. This single change is projected to unlock billions of dollars in capital, fundamentally altering the financial landscape. “It will remove cannabis companies’ unfair tax burden, allowing operators to reinvest in new infrastructure and job growth in the communities we serve,” Bachtell explained.

The impact is expected to be swift and widespread. With newfound capital, companies will be able to lower prices for consumers, increase employee wages, and invest in research and development. The move is also seen as a crucial step toward opening the doors to traditional financial services. While not a complete solution, rescheduling significantly reduces the perceived risk for banks and financial institutions that have been hesitant to serve the industry.

This anticipated financial relief sent shockwaves through the market, with cannabis stocks surging in the weeks leading up to the announcement. Some stocks saw gains of over 80% in the last month, reflecting investor optimism that the industry is on the cusp of a new era of mainstream investment and sustainable growth. Industry analysts believe this will pave the way for more institutional capital to enter the space, which has long been starved of traditional funding sources.

From Illicit Substance to Accepted Medicine: A New Dawn for Research

Beyond the profound economic implications, the move to Schedule III represents a monumental scientific and cultural validation. The Schedule I classification, which groups cannabis with drugs like heroin and LSD, has long carried the federal designation of having "no currently accepted medical use and a high potential for abuse." This classification has created immense regulatory hurdles, effectively stifling comprehensive medical research in the United States for decades.

Reclassifying cannabis as a Schedule III substance—a category that includes substances like Tylenol with codeine and ketamine—formally acknowledges its accepted medical value and lower potential for abuse. This move follows an August 2023 recommendation from the Department of Health and Human Services (HHS), which, after a scientific review by the Food and Drug Administration (FDA), concluded that cannabis does indeed have legitimate medical applications.

The shift is expected to dismantle many of the barriers that have prevented scientists from thoroughly studying the plant's therapeutic potential. Researchers will find it easier to gain access to cannabis for clinical trials, which could accelerate the development of new treatments for conditions such as chronic pain, anorexia, and chemotherapy-induced nausea.

In a further effort to expand patient access, the executive order also detailed a pilot program allowing senior citizens on Medicare to receive reimbursement for CBD and medical cannabis products, up to $500 annually, beginning in April 2026. This measure directly addresses the affordability and accessibility of cannabis for a key patient demographic. As Bachtell noted, the rescheduling “unlocks opportunities for comprehensive medical research” and “validates the work of state leaders who pioneered thoughtful, highly regulated cannabis programs for their constituents.”

A Political Gambit with an Uncertain Path Forward

President Trump’s executive order is a decisive political maneuver designed to bypass a regulatory process that had stalled within the Drug Enforcement Administration (DEA). After the HHS recommendation in 2023, the DEA issued a proposed rule to reschedule cannabis in May 2024, but progress had since slowed. The President framed his action as a "common sense" response to the needs of suffering Americans, fulfilling a campaign promise to re-evaluate the federal government's stance.

However, the path to final implementation is not without potential obstacles. The executive order directs the Attorney General to expedite the rulemaking process, which will still require publishing a final rule in the Federal Register, followed by a mandatory public comment period. This phase is almost certain to attract legal challenges from opponents of rescheduling, which could delay the rule from taking effect.

Furthermore, it is critical to note that rescheduling is not federal legalization. Recreational cannabis will remain illegal under federal law, and the complex patchwork of state-legal markets will continue to operate in a gray area. The decision does, however, significantly bridge the gap between federal policy and public will, where nearly 90% of Americans support some form of cannabis legalization.

The move also carries significant weight for social justice reform. For decades, the enforcement of cannabis prohibition has disproportionately affected minority communities. While rescheduling does not automatically trigger criminal record expungements or release those incarcerated for cannabis offenses, it sends a powerful signal. Bachtell argued it "sends a strong message to our criminal justice system to stop imprisoning people for a plant that’s been used as medicine for more than 5,000 years." This shift in federal posture is expected to add considerable momentum to legislative efforts aimed at broader criminal justice reform and full federal legalization, marking a pivotal step in ending the decades-long war on cannabis.