Trump Weighs Executive Order to Advance Cannabis Rescheduling

President Donald Trump is weighing an executive order that would push the federal government to reclassify cannabis, a step that could mark the most significant shift in U.S. cannabis policy in decades—even as the White House cautions that no final decision has been made.

The deliberations, first reported late Thursday by The Washington Post, center on moving marijuana from Schedule I—the government’s most restrictive category, reserved for drugs deemed to have no accepted medical use—to Schedule III, a classification that would acknowledge medical value and loosen some federal controls. 

“This is an encouraging development and a strong indicator that comprehensive legalization is no longer a distant goal,” says Sorse Tech CEO Howard Lee.

The Post reported Trump discussed the potential policy change in a call that included House Speaker Mike Johnson and cannabis industry executives, alongside senior administration officials. Johnson voiced skepticism, the report said, while industry participants pressed the case that rescheduling would reduce barriers to research and help normalize a legal market that now operates in tension with federal law. 

In response to the news, Sasha Nutgent, VP of cannabis retail for Housing Works Cannabis Co. out of New York, tells Cannabis Now that with today’s current cannabis classification, “retailers are not incentivized to operate legally. Reclassification would change that for thousands of businesses, especially those owned by folks from communities most impacted by the War on Drugs.”

Industry and Markets Brace for Potential Policy Change

News of the possible executive order rippled quickly through financial markets early this morning. Cannabis-related stocks and exchange-traded funds jumped in premarket trading after the Post report, according to Reuters, reflecting investor optimism that a federal shift could ease access to capital and reduce tax burdens that have long squeezed state-legal operators. 

Rescheduling, however, would not legalize marijuana nationwide. Even supporters describe it as a narrower, technical move with broad downstream effects—especially for research, medical access and business operations—rather than a sweeping rewrite of prohibition-era policy. 

Gennaro Luce, founder and CEO at CannaLnx, powered by EM2P2, argues that “Rescheduling is an important and overdue shift for patient-centric healthcare, but the move to Schedule III alone isn’t enough to make medical cannabis more accessible or affordable.”

Luce says insurers still need verification, compliance and eligibility frameworks before they can treat medical cannabis like a real benefit. “That part of the system is still missing from the national conversation — fortunately, it’s the medical-cannabis system piece we’ve already built and tested alongside physicians, patients, dispensaries, POS systems and insurers.”

Legal Nuances Stall Progress

President Trump’s considerations land on well-trodden terrain. The modern push to reconsider cannabis’ federal classification accelerated under President Joe Biden, whose administration initiated a review that produced a recommendation from the Department of Health and Human Services to move cannabis to Schedule III. The Justice Department formally began the rescheduling process in 2024, opening the door to rulemaking that has since faced delays and political crosscurrents. 

Policy experts say an executive order can direct agencies and set priorities, but it cannot, by itself, rewrite the Controlled Substances Act. Any durable change to cannabis scheduling ultimately runs through federal administrative procedures led by the Justice Department and the Drug Enforcement Administration, including scientific findings, legal analysis and formal rulemaking steps. That legal nuance has become familiar to cannabis readers—and to anyone who has watched the issue ricochet between campaign promises and bureaucratic reality.

In past coverage of cannabis executive action, Cannabis Now has emphasized that the “stroke of a pen” theory often collides with the limits of federal authority, even when presidents or governors have wide latitude to shape enforcement priorities and regulatory posture. Still, the political stakes are unmistakable. A Trump-backed push to reschedule could scramble the usual partisan map on cannabis, where national Democrats have often positioned themselves as the party of reform while Republicans have been divided between states’-rights advocates and prohibition-aligned lawmakers.

The Post report suggested Trump views rescheduling as a way to “cut restrictions” without endorsing full legalization—a framing that could appeal to voters who support medical access and regulated markets but remain cautious about broader social change. 

For the cannabis industry, the practical implications of Schedule III are potentially enormous—but also uneven. Operators have argued that rescheduling could reduce certain federal tax penalties and make it easier for institutions to do business with cannabis companies.

Ryan Hunter, chief revenue officer for Colorado-based Spherex, a leader in cannabis extraction and purification, offers perspective: “Cannabis is still federally illegal—but even as a federally illegal substance, the move to Schedule III dramatically reduces the federal tax burden for operators. Under IRS code 280E, handling Schedule I or Schedule II substances eliminates the ability for operators to deduct standard operating expenses that most other businesses deduct from their federal taxes. As a result of 280E, cannabis operators’ effective tax rate may be as high as 80 pecent. Beyond this significant improvement, the implications are unclear, but we’re hopeful that this move will allow for cannabis operators to garner the same investment opportunities other industries will enjoy.”

Rescheduling’s Promise and Uncertainty

Analysts told Reuters that shifting cannabis to Schedule III could also accelerate pharmaceutical research and distribution models, even as state-legal markets continue to rely on a patchwork of rules that vary widely from one jurisdiction to another. Critics, including some in Congress, argue rescheduling risks moving faster than the science. The Post reported Johnson referenced studies he said cut against reclassification, reflecting a broader debate over how to weigh evidence of therapeutic benefits against risks of misuse and dependency. 

What happens next could hinge on timing and follow-through. An executive order, if issued, would likely instruct cabinet agencies to prioritize or expedite the administrative process rather than instantly change marijuana’s legal status. Even then, opponents could challenge the move politically and in court, while regulators would still need to align policy with existing federal statutes and international commitments.

“Whenever the White House moves forward with Schedule III, the federal government is effectively telling us that cannabis is medicine,” comments Calyx Containers President and Co-Founder Alex Gonzalez. “And if it’s medicine, ‘good enough’ cannabis practices won’t cut it anymore. Whether rescheduling happens next month or next year, the direction is clear: Cannabis is moving toward pharma-grade standards. For brands, that means tightening quality systems, investing in the ability to react or scale, and preparing for a regulatory-ready supply chain. We’re seeing the smart operators onshoring infrastructure, and we’re positioning our domestic production and business model on being ready to help operators turn this moment into a competitive advantage.”

In the meantime, the national reality on cannabis continues to diverge from federal law. Most states now allow marijuana for medical use, and a growing number permit adult-use sales—a shift that has normalized cannabis commerce for millions of Americans while leaving businesses and consumers navigating legal gray zones that are invisible at the dispensary counter but very real at banks, research institutions and federal agencies.

“Rescheduling is the single most important drug policy move in decades. The potential opportunities for medical and scientific research will significantly increase, while those living in states without an existing medical program will now have access to the powerful healing properties of the plant,” says Mark Lewis, president of specialty banking at Lüt.

“Make no mistake though, rescheduling is just the beginning for those working in the cannabis industry. Until the SAFE Banking Act or 280E is passed, operators will still have to jump through challenging financial hoops to pay their staff, bills or garner investment. The moment is historic, but until cannabis businesses can operate fiscally with the same ease as any other business, more work needs to be done,” Lewis continued. “Payments still need to work in the reality of today, where the ongoing threat of card network shutdowns exists, not just the promise of future reform. While rescheduling may open doors over time, it does not remove the day-to-day financial friction that cannabis operators face right now.”

Whether Trump ultimately signs an order or backs away, the past 24 hours have underscored a core truth of cannabis politics in Washington: Even incremental change can move markets, reshape messaging and reopen debates that Congress has struggled for years to settle.