The Rescheduling of Cannabis - The Source

The Rescheduling of Cannabis – The Source

December 24, 2025

The year 2025 saw something cannabis workers and users have been advocating, working for, and hoping to come to pass – rescheduling cannabis. It’s a big deal. Here’s what that will mean…probably.

What’s the Schedule? The Controlled Substance Act is overseen by the Federal Drug Administration and Drug Enforcement Administration, and lists all controlled substances and drugs into five numbered categories. Each category represents both the legitimate medical value, and the potential for addiction and abuse.

Inexplicably, cannabis has always been classified as a Schedule I drug, which have “… no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are: heroin, lysergic acid diethylamide (LSD), marijuana, 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote.”

In 2022, President Biden began exploring having cannabis rescheduled to Schedule III, and in April 2024, the Justice Department formally began the process. Schedule III are drugs and substances with a “…moderate to low potential for physical and psychological dependence…” and include “…products containing less than 90 milligrams of codeine per dosage unit (Tylenol with codeine), ketamine, anabolic steroids, testosterone.”

Last month, President Trump announced the rescheduling by Executive Order, directing the Attorney General to expedite completion of the steps necessary to enact this. This means that until further notice, nothing has changed.

Is Cannabis Now Legal?

No. The 42 U.S. states, three territories and District of Columbia that have medical cannabis programs, along with the Adult Use aka Recreational Use programs in 24 states and D.C, will not see any changes…yet.

For cannabis to be federally legal, it would need to be descheduled, which is the ultimate goal of cannabis advocates. All sorts of fantastic things could happen then, but that remains an elusive goal. As it stands, expect legal challenges to the rescheduling from opponents.

Who Benefits From Rescheduling?

We all win insofar as some barriers to medical cannabis research are expected to be lifted.

Cannabis will now be recognized as having potential legitimate medical value. That should ease both the restrictions placed upon researchers when working with cannabis, and the willingness of universities and other research bodies toward working with cannabis.

Getting Federal approval to research cannabis as a Schedule I drug is lengthy, expensive, and requires researchers to track literally every gram of cannabis. Fewer restrictions and lower costs should help research flourish. And schools receiving federal money will now be able to work with cannabis without fear of being in conflict with federal law, and losing funding.

Another winner is the cannabis industry itself, which has always operated under the singularly punitive tax code 280E.

That tax code eliminates any and all tax credits and deductions for any cannabis business, making their effective tax rate up to 80%. (In other words, of every dollar of profit made by a cannabis business, up to .80 goes to the Feds.) Being able to claim deductions and credits are going to result in tremendous savings for cannabis businesses, in turn increasing their cash flow.

Some of these savings could be passed along to the consumer, resulting in lower prices at the dispensary. The rescheduling may finally open access to credit and banking as well, resulting in more savings.

What About CBD?

It’s good news here too, but somewhat murkier as far as who will benefit, and to what degree.

As MJBizdaily.com reports, Trump has directed Cabinet members to “…to work with Congress to update the definition of hemp to allow “access to full-spectrum CBD products.” as well as “…develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products.”

This could result in a change to the .4% THC limit in hemp-derived CBD products that will go into effect next year.

A pilot program announced by the Centers for Medicare & Medicaid Services, which would cover up to $500 per year for hemp-derived CBD products to eligible Medicare patients and “..allow millions of Americans on Medicare to become eligible to receive CBD as early as April of next year and at no charge, if their doctors recommend them.”

Incremental change is change nonetheless. Full decriminalization will still happen, but this is a long awaited next step after 50 years labeled Schedule I.

This article appears in the Source January 1, 2026.