Trump Orders Federal Action to Accelerate Cannabis Research Access
President Trump directed federal agencies Thursday to complete the marijuana rescheduling process initiated under the previous administration, focusing the executive action on expanding medical research opportunities for cannabis and CBD compounds.
The executive order instructs the attorney general to finalize the reclassification of marijuana from Schedule I to Schedule III under the Controlled Substances Act, a shift that administration officials characterized as removing bureaucratic obstacles to scientific study rather than addressing recreational use or criminal penalties.
In a press briefing, a Trump official said the primarily goal is to focus on the potential medical benefits and improving CBD research so doctors and patients can be better informed.
The distinction between scheduling categories carries significant regulatory implications. Schedule I classification designates substances the federal government considers to have no accepted medical use. Schedule III classification acknowledges moderate to low potential for dependence and recognizes accepted medical applications. The Biden administration had begun the rescheduling review but did not complete the regulatory process before leaving office.
Administration officials referenced Department of Health and Human Services findings from 2023 showing more than 30,000 licensed health care practitioners nationwide currently recommend medical marijuana to over 6 million registered patients for at least 15 distinct medical conditions. As a Schedule I drug, there is a clear conflict between the scheduling and the medical world.
Businesses can breathe a sigh of relief. Beyond research access, the Schedule III designation would permit cannabis businesses to deduct ordinary business expenses and claim tax credits on federal returns, benefits currently prohibited for businesses handling Schedule I and II substances. This change could provide substantial financial relief to state licensed marijuana operators who currently face effective tax rates exceeding 70% due to Internal Revenue Code Section 280E restrictions.
Stocks have rallied hard in recent days on rumors that Trump would be taking action. To that end, stocks were selling-off today ahead of the penning of the executive order. More on this can be found in our Sector Watch article published earlier today. Shares of Aurora Cannabis (NASDAQ: ACB) (TSX: ACB) are up 5.8%, Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) is off 7%, Innovative Industrial Properties (NYSE: IIPR) is down 2.9%, while Trulieve (OTCQX: TCNNF) (CSE: TRUL) is well off its low of the day, but still down 5.2% shortly after the executive order announcement.
The executive order explicitly does not address criminal penalties associated with marijuana possession or distribution, nor does it impact the patchwork of state laws governing recreational use. Administration officials declined to specify whether Trump would consider federal action on recreational marijuana legalization, directing questions about potential future policy to ongoing regulatory review.
Trump had signaled openness to completing the rescheduling process as early as August 2025, aligning himself with the medical research justification while maintaining distance from broader legalization debates. The executive action positions the administration as pursuing what officials described as a "commonsense" middle ground focused on scientific inquiry rather than comprehensive cannabis policy reform.
The rescheduling process will now accelerate through the Department of Justice, though officials provided no timeline for formal completion of the regulatory changes required to implement Schedule III classification.
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