Trump Orders Marijuana Rescheduled, Broader CBD Access in Major Announcement: What Does It Mean? | Cannabis Law Report | Where to order Skittles Moonrock online

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Are you not entertained? In a much-anticipated ceremony in the Oval Office, President Trump signed an executive order that (1) directs the attorney general to expeditiously reschedule marijuana to Schedule III and (2) instructs senior White House staff to work with Congress to revise the statutory definition of final hemp-derived cannabinoid products.

The first of these had been widely expected, although as we discuss below it raises many of the same questions that existed after President Biden urged federal agencies to reevaluate marijuana’s status in the Controlled Substances Act. The second was a bit more of a surprise to us, as we had not expected the order to give such prominence to hemp.

The importance of the president’s action cannot be overstated. But pump the breaks some. Marijuana, at the present, remains a Schedule I substance, and several very important steps must still be taken before the executive order’s directives have materialized. The picture will look clearer when we hear from other executive agencies, such as FinCEN, DOJ, and FDA. For now, let’s look at the executive order’s text, some additional guidance from the White House, and try to connect some dots about what this all means.

What Does the Order Actually Say?

The order begins with a robust description of its purpose and policy, beginning with how our country arrived at our current unprincipled and untenable marijuana policy:

Forty States plus the District of Columbia have State- or locally-sanctioned, regulated medical marijuana programs.  Yet decades of Federal drug control policy have neglected marijuana’s medical uses.  That oversight has limited the ability of scientists and manufacturers to complete the necessary research on safety and efficacy to inform doctors and patients.

Next, on the increasing use of marijuana as a therapeutic and the federal government’s role in preventing that care, the order states:

The Federal Government’s long delay in recognizing the medical use of marijuana does not serve the Americans who report health benefits from the medical use of marijuana to ease chronic pain and other various medically recognized ailments. Americans who often seek alternative relief from chronic pain symptoms are particularly impacted. For example, in one research survey, 20 percent of participating United States veterans reported using fewer opioids as a result of their medical marijuana use. One in 10 seniors used marijuana in the last year and some evidence shows improvements in seniors’ health-related quality of life and pain with medical marijuana use.

The order then characterizes marijuana’s status as Schedule I as an impediment to researching the plant’s capabilities:

However, the current Schedule I position of marijuana has impeded research. The lack of appropriate research on medical marijuana and consequent lack of FDA approval leaves American patients and doctors without adequate guidance on appropriate prescribing and utilization. One patient survey showed that just 56 percent of older Americans using marijuana have discussed the usage with their healthcare provider. This places patients, especially seniors who may be on multiple medications, at increased risk of drug interactions or other adverse events. The Federal Government must improve the research infrastructure for medical marijuana to better serve Americans.

Switching to marijuana’s sister plant, on the potential medical benefits of CBD, the order observes:

In addition to medical marijuana, which is primarily made up of two cannabinoids — cannabidiol (CBD) and tetrahydracannabinol (THC) — hemp-derived cannabinoid products, defined by section 297A of the Agricultural Marketing Act of 1946 (7 U.S.C. 1639o), have shown potential to improve patient symptoms for common ailments and are frequently used by Americans. One in 5 United States adults and nearly 15 percent of seniors reported using CBD in the past year, and chronic pain patients have reported improvements with CBD use in clinical studies. Furthermore, evidence suggests that the amount of THC in hemp-derived cannabinoid products can affect both pain treatment efficacy and adverse events. Hemp-derived cannabinoids, as defined in 7 U.S.C. 1639o, are not controlled substances under the CSA but are subject to the same authorities and requirements as FDA-regulated products containing any other substance.

The order then tackles the recent federal law effectively banning most CBD products:

Adding complexity is the fact that some full-spectrum CBD products will once again be controlled as marijuana under the CSA . . . because they contain THC levels above the per-container threshold set by that law [and based on findings of inaccurate product labeling and the potential for safety risks]. In short, the current legal landscape leaves American patients and doctors without adequate guidance or product safeguards for CBD.

Section 1 of the order concludes with a statement of policy and purpose:

It is the policy of my Administration to increase medical marijuana and CBD research to better inform patients and doctors. It is critical to close the gap between current medical marijuana and CBD use and medical knowledge of risks and benefits, including for specific populations and conditions. Research methods and models should include real-world evidence and should facilitate affordable access in order to rapidly assess the health outcomes of medical marijuana and legal CBD products while focusing on long-term health effects in vulnerable populations like adolescents and young adults.

The operative section of the order followed:

Sec. 2. Rescheduling Medical Marijuana and Improving Access to Cannabidiol Products. (a) The Attorney General shall take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the CSA in the most expeditious manner in accordance with Federal law, including 21 U.S.C. 811.

(b)  The Assistant to the President and Deputy Chief of Staff for Legislative, Political, and Public Affairs shall work with the Congress to update the statutory definition of final hemp-derived cannabinoid products to allow Americans to benefit from access to appropriate full-spectrum CBD products while preserving the Congress’s intent to restrict the sale of products that pose serious health risks. This will include consultation with appropriate executive departments and agencies and authorities to develop a regulatory framework for hemp-derived cannabinoid products, including development of guidance on an upper limit on milligrams of THC per serving with considerations on per container limits and CBD to THC ratio requirements. The Secretary of Health and Human Services, the Commissioner of Food and Drugs, the Administrator of the Centers for Medicare and Medicaid Services, and the Director of the National Institutes of Health shall develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products in accordance with Federal law and to inform standards of care.

What a time to be alive. This full-throated endorsement of marijuana rescheduling and general cannabis reform comes from a government where all three branches are controlled by Republicans? How long have we been asleep?

White House Talking Points

Here’s how the White House characterized the provisions of the order in a Fact Sheet released following the ceremony:

• The Order corrects the Federal government’s long delay in recognizing the medical use of marijuana;
• The lack of appropriate research on medical marijuana and consequent lack of FDA approval leaves American patients and doctors without adequate guidance on appropriate prescribing and utilization;
• Schedule III status will allow research studies to incorporate real-world evidence and models that can assess the health outcomes of medical marijuana and legal CBD products while focusing on long-term health effects in vulnerable populations like adolescents and young adults;
• President Trump is paving the way for enhanced research and better information on hemp-derived cannabinoid products, helping to inform patients and doctors about their potential role in managing common health conditions;
• Hemp-derived cannabinoid products have potential to improve patient symptoms for common ailments and are frequently used by Americans;
• The challenging legal landscape for CBD products, including recent changes that affect full-spectrum CBD products, leaves American patients and doctors without adequate guidance or product safeguards; and
• Legislative solutions and innovative research methods and models are needed to improve access and inform standards of care. This Administration is committed to work expeditiously to provide clarity and access as appropriate.

What the Order Does and Does Not Mean for Marijuana

For those of you who have been paying attention, you know well that this isn’t our first rodeo down this path. Following President Biden’s 2022 directive that HHS reevaluate marijuana’s federal status, HHS officially recommended that marijuana be rescheduled from a Schedule I to Schedule III controlled substance in August 2023. That recommendation was historic, as it represented the first official recognition by a federal agency that marijuana has medical value and has a lower propensity for abuse and addiction. We have written on this several times.

Several points bear repeating. The rescheduling wouldn’t legalize marijuana, but it would loosen research restrictions, allow cannabis businesses to take federal tax deductions, and symbolically recognize that the plant holds medical value — breaking from the federal government’s decades-long position that it is therapeutically ineffective with a high abuse potential.

Most agree that the most impactful result of rescheduling is the removal of the draconian tax consequences of 280E – one of the most significant impediments to the growth of marijuana operators, and dispensaries in particular, is 26 U.S.C 280E. That one-sentence provision may be the biggest hurdle to the development of the marijuana industry in the United States. It dictates that:

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

280E has crippled the marijuana industry, often exacting an effective tax rate north of 60% for operators. “Within the meaning of schedule I and II of the Controlled Substances Act” is the ballgame. If marijuana is rescheduled to Schedule III, 280E would no longer apply and marijuana operations would be taxed as normal businesses – provided that Congress did not specifically enact a marijuana tax.

Obviously, state tax laws may still penalize marijuana businesses akin to 280E, but some states proactively exempted licensed cannabis businesses from those impacts – including Mississippi via Miss. Code Ann. § 41-137-51.

Beyond this tax relief and the opening of research opportunities, the impacts of rescheduled marijuana become less known. And at the top of the list of questions we have been recently fielding is how this move could alter the existing state programs.

The way we see it, there are three paths forward for state-licensed marijuana operators if marijuana is rescheduled:

1. The federal government, in a break from more than a decade of quasi-official federal policy, could actually follow the Controlled Substances Act and require marijuana operators to meet the requirements for Schedule III substances.
2. There is no practical change and the federal policy of non-enforcement of most marijuana operations remains in place, along with a similar posture from the states with marijuana regimes.
3. There is no immediate change in federal enforcement policy, but states tighten marijuana rules over time to allow for a gradual change such that access to marijuana is not immediately shut off as the federal government and marijuana operators take the steps necessary to treat marijuana like other Schedule III substances.

Like state-licensed medical marijuana operators, state-licensed adult-use operators have also been operating in legal purgatory, albeit with probably less legal certainty than medical operators.

To be very clear: Rescheduling marijuana under the Controlled Substances Act will do absolutely nothing to the legality of adult-use marijuana. Schedule III regulates medications prescribed by physicians and does not contemplate the recreational use of any Schedule III product.

But what does this actually mean for adult-use programs and individual operators as a practical matter? Well, as with several of the points above, we’ll see.

It is certainly possible that the federal government will continue its hands-off approach to adult-use marijuana programs. It is also possible that the federal government – and potentially some state governments – will use the ability to access federally legal marijuana by prescription to scrap existing adult-use programs. We would expect, however, that if the federal government chooses a more hands-on approach, it will take quite a bit of time before the changes are implemented.

What the Order Does and Does Not Mean for Hemp

The headlines we’ve seen since last Thursday’s big day have mostly all focused on the rescheduling of marijuana — and rightly so. But what the president’s action says about hemp is significant.

In the wake of what looked to be a doomsday scenario for the hemp industry, President Trump’s rescheduling announcement contained encouraging pronouncements for CBD/hemp. The order not only directs Congress to reconsider how it redefined “hemp” just a few months back, it pushes for the development of a regulatory framework for hemp-derived products and pushes for more research on the potential benefits of CBD. Even more, the Trump administration announced plans to create a pilot program that would utilize Medicare to help fund older Americans’ access to CBD products.

Another thought we’ve had is whether the anticipated federal guidelines on testing, packaging/labeling, etc. of hemp products either mirror existing cannabis program rules or serve to shape the regulatory framework over a new Schedule III world. Perhaps these new hemp rules foreshadow what’s to come for marijuana?

Reactions from Stakeholders

It should come as no surprise that the reactions to this news vary. From extreme jubilation to cautious optimism to disdain, industry stakeholders vocalized their thoughts.

• Sen. Minority Leader Chuck Schumer: This is a step in the right direction — but more work must be done to decriminalize cannabis, ease overly restrictive banking regulations that stall industry progress in states where it is legal, and rectify the harms done by the War on Drugs. I remain committed to the SAFER Banking Act and the Cannabis Administration & Opportunity Act to accomplish these goals.

• Jason Ortiz, Last Prisoner Project Director of Strategic Initiatives: President Trump’s decision to reschedule cannabis is a historic step that reflects the will of the American people. However, moving cannabis to a lower schedule does nothing for the tens of thousands of Americans still locked behind bars for actions that are now legal in most of the country. Thankfully, President Trump has demonstrated he is willing to act boldly to correct outdated policies. By pairing rescheduling with clemency for people incarcerated for cannabis, he can cement his legacy as the leader who has done more for cannabis justice than any other president in American history.

• Kevin Sabet, Smart Approaches to Marijuana (SAM) President: This rule, if finalized, will herald a public health disaster. It’s a full betrayal of the president’s promise to keep all Americans safe and healthy. This is a giant gift to Big Marijuana and its pushers who are now more incentivized to target children with their highly addictive products.

  Thankfully, this decision does not legalize marijuana, but it gifts the industry with more than $2 billion in tax write-offs at a time when their advertising is inflicting carnage on America’s families. In reality, this is a pyrrhic victory for the industry. They have failed in their attempt to legalize their products, and they were dealt a huge blow with the new law outlawing Delta-8 and other synthetic pot products. In addition, they are facing increased pressure in legalized states, with several now considering a rollback of such policies. The implications for marijuana products remain unclear, since now the Food and Drug Administration (FDA) will have enforcement jurisdiction over them in a way only the Drug Enforcement Administration currently does.

• Jonathan Miller, U.S. Hemp Roundtable General Counsel: The U.S. hemp industry is deeply grateful to President Trump for issuing his strong pro-hemp Executive Order today. While the headlines of the announcement will focus on marijuana rescheduling – which is a positive in itself, for any cannabis reform benefits the entire plant – we are especially pleased to see the provisions that direct the White House staff and urge Congress to ensure access to hemp-derived, full-spectrum CBD products, a lifeblood of the industry.

  We are also thrilled to see the development of a model that would allow a number of Medicare beneficiaries to receive CBD under doctor recommendation at no cost. We consider this Executive Order to be a direct rebuke to the hemp ban that was malignly attached to legislation that reopened government. This also gives strong impetus to efforts to extend the ban’s moratorium an additional 18 months to allow proper time for Congress and the Trump Administration to develop the regulatory framework that ensures the safe provision of hemp products while cracking down on the bad actors peddling the unsafe products that the Executive Order calls out. We look forward to working with the President, his staff, HHS, and Congress in the coming months to ensure the bipartisan vision of a safe, legal, and regulated hemp extract industry.

And it wouldn’t be complete without hearing from Iron Mike Tyson:

Thank you @POTUS @realDonaldTrump for rescheduling cannabis. This decision reflects listening to people across the country and taking a practical step toward modernizing outdated policies. It supports American workers, families, and businesses, and allows over 500,000 existing jobs to finally be counted.

So, What Happens Next?

How will this rulemaking process differ from the one that followed Biden’s order a few years ago? Trump’s executive order directs Bondi to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the CSA in the most expeditious manner in accordance with Federal law, including 21 U.S.C. 811.” (emphasis added)

This outlines what the CSA requires with respect to the rulemaking process. In what circumstances can these processes be sped up?

The questions we have previously raised remain (e.g., how will this really impact state programs/licensees)? We’ve covered this before, but this executive order may tell us a bit more. Some of the text above seems to condone, in some respects, state medical programs. The order is replete with statements regarding marijuana’s medical benefits. We can’t imagine federal officials singing all these praises while simultaneously shutting down patient access to this medicine while the federal rules are being written and implemented.

Maybe 2026 is finally the year we see these “historic” announcements actually lead to “historic” tangible actions and results. We can assure you we are watching this and will keep all of you good people apprised at every turn of this long and winding road.

Happy Holidays from all of us at Budding Trends!