Trump Signs Order to Ease Marijuana Restrictions

President Donald Trump revived long-awaited efforts to ease federal restrictions on cannabis, a move that was received with a mix of cautious optimism

On December 18, 2025, President Donald Trump signed an executive order titled "Increasing Medical Marijuana and Cannabidiol Research," marking a major shift in federal cannabis policy. 

Key Actions of the Order

• Expedited Rescheduling: Directs the Attorney General to fast-track the process of reclassifying marijuana from Schedule I (drugs with no accepted medical use, like heroin) to Schedule III (drugs with moderate-to-low potential for dependence, like Tylenol with codeine).
• Medicare CBD Pilot: Authorizes the Centers for Medicare and Medicaid Services (CMS) to launch a program next year to reimburse patients—specifically seniors and those with chronic conditions like cancer—for medically recommended CBD products.
• Medical Research Expansion: Removes long-standing federal barriers that hindered clinical studies, allowing researchers to more easily evaluate the safety, efficacy, and medical benefits of cannabis. 

What the Order Does NOT Do

• No Federal Legalization: Marijuana remains illegal under federal law. Possession can still result in federal arrest.
• No Recreational Approval: The order specifically focuses on medical use and research; it does not authorize or sanction recreational use.
• State Law Preemption: It does not immediately overturn state-level bans or restrictions. States maintain the authority to regulate their own cannabis programs. 

Economic and Industry Impacts

• Tax Relief (Section 280E): Rescheduling to Schedule III will allow state-legal cannabis businesses to take standard federal tax deductions (like rent and payroll), which were previously prohibited.
• Banking and Investment: The move is expected to decrease compliance fears for financial institutions, potentially opening access to traditional banking and institutional capital for the industry.
• Hemp Product Regulation: Instructs the administration to work with Congress to update rules for hemp-derived products, aiming to ensure full-spectrum CBD remains available while restricting high-THC "intoxicating" hemp products.