Trump Signs Order to Ease Cannabis Limits in Industry Win (1)

President Donald Trump on Thursday signed an executive order directing his administration to move cannabis into a less restrictive federal category, setting in motion a regulatory shift that could alter the legal and commercial landscape for the drug nationwide.

“We have people begging for me to do this, people that are in great pain for decades,” Trump said. “This action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems, and more.”

The order instructs the Justice Department to begin the steps needed to shift cannabis to Schedule III, a tier reserved for drugs with accepted medical uses and lower abuse potential. Marijuana is currently labeled Schedule I, the government’s most restrictive class, alongside substances such as heroin and LSD.

Trump had discussed the plans with Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare and Medicaid Services Administrator Mehmet Oz as he weighed his decision, according to people familiar with the move, who spoke on condition of anonymity to discuss private deliberations. Trump also spoke with cannabis industry leaders ahead of the decision, the people said, including Kim Rivers, chief executive officer of Trulieve Cannabis Corp.

The president’s decision delivers a major win to the industry, which conducted a years-long campaign for clearer federal rules. Rescheduling the drug could open the way for more clinical research and FDA-reviewed cannabis-based medicines, providing a clearer path to market for companies developing medical marijuana products and potentially attracting larger pharmaceutical companies into the sector.

It would also ease headaches for businesses in the industry by eliminating a punitive tax rule — known as 280E — that bars companies that deal in federally illegal substances from deducting ordinary expenses.

“The facts compel the federal government to recognize that marijuana can be legitimate in terms of medical applications when carefully administered,” Trump said. “In some cases, this may include the use as a substitute for addictive and potentially lethal opioid painkillers.”

Oz announced that the Centers for Medicare & Medicaid Services will also complete a plan to test making some Medicare patients eligible for therapies derived from cannabinoids, the naturally occurring compounds in cannabis.

The initiative, which Bloomberg reported last month has been under development, is expected to begin in April 2026 and would allow Medicare Advantage patients to purchase as much as $500 of regulated hemp-derived products per year under their federal health benefits, Oz said.

The proposal has been pushed by Howard Kessler, a payments financier close to the president who has advocated for expanded CBD access. He was among the industry leaders who met with Trump on the plans to reschedule cannabis. Kessler and Rivers both attended the rollout Thursday in the Oval Office.

A spending bill Trump signed in November included language that could sharply restrict access to many hemp-derived CBD products that contain trace amounts of THC, marijuana’s intoxicating component. The executive order directs the administration to develop research methods to improve access not only to marijuana but hemp-derived CBD. The move signals the White House will work with Congress to revise that language so that certain CBD products remain accessible after the ban takes effect in late 2026.

The president also urged Congress to clarify how it regulates CBD more broadly, saying lawmakers could “ensure seniors can access CBD products they have found beneficial for pain.”

Congress could move to regulate CBD as a dietary supplement, according to a senior White House official who briefed on the request on the condition of anonymity, putting it in the same category as over-the-counter products like melatonin or fish oil. The Biden-era FDA rejected three petitions asking the agency to change how it regulates CBD, urging Congress to instead craft its own framework. CBD is used as a remedy for sleep disorders, anxiety, pain and inflammation.

The only CBD medication approved by the FDA, Jazz Pharmaceuticals’ Epidiolex, has also shown promise in treating certain severe childhood epilepsy syndromes.

Trump’s directive does not legalize marijuana nationwide, nor does it take effect immediately.

The executive order instructs agencies to restart a formal rule-making process led by the Drug Enforcement Administration and the Department of Health and Human Services that has been paused since January.

That would effectively kick-start a process begun under former President Joe Biden in 2022, when he asked the HHS secretary and US attorney general to review the federal classification of marijuana. The Justice Department later recommended moving the drug to Schedule III, prompting a formal review at the DEA. That effort, however, became mired in legal challenges and agency delays.

US regulation of cannabis is currently a patchwork of differing rules across the 50 states. About half of the states allow it for recreational use, according to the National Conference of State Legislatures. More than 40 states and the District of Columbia allow marijuana use for medical purposes.

Even with a Schedule III designation, the drug will remain illegal federally, and state-licensed recreational operators would still face scrutiny from banks and institutional investors. Stabilizing access to financial services would likely require passage of the Secure and Fair Enforcement Regulation Banking Act or similar legislation that protects banks and credit unions from penalties for serving the industry. Earlier versions cleared the House multiple times but repeatedly stalled in the Senate.

(Updates with additional information, context starting in eighth paragraph)

To contact the reporter on this story:
Charles Gorrivan in New York at cgorrivan@bloomberg.net

To contact the editors responsible for this story:
Emily Cohn at ecohn24@bloomberg.net

Michelle Jamrisko, Jordan Fabian

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