The announcement of the rescheduling of medical cannabis products this week has been one of the most significant policy shifts in the U.S. cannabis industry and broader drug policy in years, which is set to potentially ease barriers for researchers who study cannabis.

The Department of Justice and the Drug Enforcement Administration moved cannabis products approved by the Food and Drug Administration and products covered by qualifying state medical cannabis licenses to the Schedule III category under the Controlled Substances Act. Meanwhile, a separate expedited administrative hearing beginning June 29 will consider whether cannabis should also be rescheduled from the highly restrictive Schedule I category to the less restrictive Schedule III.

The decision comes after President Donald Trump’s December executive order to speed up cannabis rescheduling, at a time when medical cannabis is legal in 40 states, three territories, and Washington, DC, and recreational use is allowed in 24 states and DC, creating an industry whose sales are projected to exceed $47 billion this year, according to market researcher BDSA, as reported by Reuters.

While the federal rescheduling of medical cannabis products does not amount to full cannabis rescheduling, and even less to legalization, it marks a significant policy shift that could ease barriers to scientific research under federal controls. The move also raises the question of whether cannabis research has been driven primarily by federal restrictions or whether legalization has steered companies toward marketable products rather than clinical evidence.

This is what economists Lucy Xiaolu Wang and Nathan W. Chan of the University of Massachusetts Amherst have tried to answer by publishing a recent study in the International Journal of Industrial Organization.

Their findings show that legalization has indeed stimulated innovation, but primarily the kind that can be commercialized quickly, rather than the slower, more expensive process of rigorous medical research.

“Legalization increases innovation in the cannabis market, but with relatively weak gains in areas pertinent to health and safe use,” the study reads.

To reach this conclusion, researchers have analyzed state legalization in the U.S., distinguishing between two forms of innovation.

The first is clinical trials, which involve human participants that test efficacy, side effects, dosage, and health outcomes. For this category, authors have built a dataset of 856 cannabis-related clinical trials worldwide conducted between 2000 and 2020, of which 559 were U.S.-based. The second is patent activity, which helps capture inventions and commercial ideas developed by companies’ research and development departments to launch their products, such as vaporizers and edibles. They identified 1,706 cannabis-related U.S. patent applications filed between 2000 and 2019.