Trump Administration Considers Cannabis Rescheduling: Potential Impacts and Challenges

The Trump administration is reportedly considering a significant shift in federal cannabis policy by moving cannabis from Schedule I to Schedule III under the Controlled Substances Act. This potential rescheduling would mark a historic change, as cannabis has been classified alongside drugs like heroin and LSD, deemed to have no accepted medical use. While this move could offer tax relief and ease research restrictions for state-legal operators, it would not equate to legalization or address broader criminal justice reforms. The White House has yet to make a final decision, but the discussion signals renewed federal interest in cannabis policy

Rescheduling cannabis to Schedule III could bring substantial financial relief to cannabis businesses by addressing the burdensome 280E tax code, which currently prevents operators from deducting ordinary business expenses. Such a change would alleviate financial pressures on many small and mid-sized businesses struggling with effective tax rates exceeding 60%. Brian Vicente, founding partner at Vicente LLP, emphasized the potential positive impact on state-legal cannabis businesses, highlighting the importance of 280E relief for their survival

Despite the potential benefits, rescheduling would maintain cannabis's federal illegality, continuing to prohibit interstate commerce and leaving federal criminal penalties intact. The move would not resolve existing conflicts between state markets and federal law, and legal risks would persist for workers, patients, and noncitizens in regulated markets. Additionally, while research access might improve, cannabis would remain under DEA and FDA oversight, limiting its recognition as an FDA-approved medicine

The broader implications of rescheduling are complex, as demonstrated by recent federal actions that have set the stage for the recriminalization of hemp-derived THC products by 2026. This dual movement of progress and restriction reflects the ongoing challenges within U.S. cannabis policy. High Times has documented the potential for rescheduling to entrench federal control, possibly favoring large corporate interests over smaller operators

Supporters of rescheduling argue it represents a necessary acknowledgment of cannabis's medical value, challenging outdated policies from the Nixon era. However, they caution that it does not address the deeper legal and regulatory gaps or deliver the comprehensive criminal justice reform many advocates seek. This tension highlights the divided perspectives within the cannabis community, with some viewing Schedule III as a step forward and others concerned about its implications for federal control

The potential rescheduling effort revives a stalled process initiated under the Biden administration, where federal health officials recognized cannabis's medical use and recommended Schedule III classification. The DEA's hearing process has been delayed, leaving the industry in uncertainty. An executive directive could expedite this process, but it would not solve the fundamental issues of cannabis legality and the looming federal crackdown on hemp

As the Trump administration considers this policy shift, the cannabis industry and its advocates must remain vigilant. While rescheduling could represent meaningful progress, it is not the end of prohibition or a comprehensive solution to the challenges facing the cannabis community. The road to full legalization and recognition remains long, requiring continued advocacy and realistic expectations