'All Necessary Steps' To Reschedule Medical Marijuana

Last week, we issued a client alert regarding President Trump's potential rescheduling of marijuana. On December 18, 2025, President Donald Trump did in fact issue an Executive Order directing U.S. Attorney General Pam Bondi to take "all necessary steps" to reschedule marijuana intended for medical use to Schedule III from Schedule I, making medical marijuana more readily available for research, testing, and personal treatment programs. With this new information, we are able to provide an overview of the order below.

For healthcare providers, and medical marijuana businesses, this marks a potentially significant shift in how medical marijuana may be researched, regulated, prescribed and commercialized at the federal level. In this client alert, we explain what this Order does, what it doesn't do, and what stakeholders should be watching for next.

'Medical' is the key word here.

For clients, this emphasis reinforces a key takeaway: any near-term federal changes are expected to apply only to marijuana used for legitimate medical purposes, not adult or recreational use.

The President's Order cites numerous examples of medical conditions reportedly allayed by personal marijuana use. The Order also criticizes the federal government for failing the American people by not fully assessing and scientifically researching the benefits and risks of medical marijuana following the 2023 Department of Health and Human Services' (DHHS) recommendation to the Drug Enforcement Agency (DEA) and the Food and Drug Administration (FDA) that marijuana has a medical use and should be reclassified. The fact that 40 states and the District of Columbia have already implemented medical marijuana programs seems to be additional support for the President's push toward rescheduling.

The Order also briefly addresses related topics involving the public's personal use of unregulated CBD and hemp-derived cannabinoid products which may contain THC (often a lot of THC), the psychoactive compound found in cannabis. These products, not currently regulated by the Federal government, present additional possible medical treatments that should be subjected to rigorous study, research, testing and regulation. Like medical marijuana, the Order directs Federal agencies to focus their attention on bringing clarity and safety to Americans' use of CBD and hemp-derived cannabinoid products.

What is not mentioned?

Although rescheduling medical marijuana may be on the President's mind, there is no mention of rescheduling marijuana in the context of adult or recreational use. This leaves room for the regulation of adult or recreational use of marijuana to the states, while establishing a federal medical marijuana program.

A word of caution: what actually shakes out from the Executive Order is unpredictable, given that the FDA and DEA have to resume administrative review of the DHHS recommendation, hold public hearings, deliberate stakeholder positions, survive appeals, issue preliminary regulations for another round of hearings, and finally publish administrative regulations to implement rescheduling.

For manufacturers, retailers, and healthcare providers, this could mean tighter compliance standards—but also clearer federal guidance—around which products can be marketed, prescribed, or sold.

What could a federal medical marijuana program achieve for consumers?

More research on potential uses, new cannabis strains, standardized testing and labeling requirements, more medical professionals prescribing marijuana treatments, more alternative treatment courses for patients and medical professionals, and expanded access and availability to needy patients across the country. More marijuana available across the country likely means lower prices to the consumer.

What could a federal medical marijuana program accomplish for marijuana businesses?

The answer would seem to be a mix of good and bad news, depending upon where your marijuana business is in the industry.

Good news: With rescheduling, it's good news for marijuana businesses formerly considered 'illegal' under the Tax Code, because rescheduling could permit them to deduct general and administrative expenses from their taxable income, like most other businesses.

With rescheduling, national and regional banks, credit unions, and other financial institutions could become more receptive to providing typical account, treasury, and lending services to marijuana businesses as customers. Normalization of banking services goes a long way to industry stability.

Rescheduling could require insurance and benefit plan changes that would cover the cost of prescribed medical marijuana treatments, resulting in higher plan participation and competitive advantages for employee retention. A much larger insurer group and varying insurance plans could emerge. Change means opportunities for new or better coverage.

Rescheduling could also substantially increase the interest of big pharma, tobacco, and alcohol companies in developing new products for consumption, investments in smaller entrepreneurial businesses offering new products and services, and the consolidation of marijuana companies into a better positioned conglomerate. Mergers and acquisitions of smaller companies into bigger companies often reward founders and employees with a big payoff for their dedication to the marijuana cause.

Rescheduling would likely stimulate interest in new marijuana programs in states without marijuana, such as Idaho and Indiana, under the assumption that marijuana use for medical treatment would now be acceptable. Legal transportation in interstate commerce could deliver California's infamous weed across the country for the first time in US history.

Bad News: Rescheduling would appear to add a complex and expensive pharma-centric program to the FDA's already full agenda. Expect every marijuana product to be subjected to lengthy comprehensive animal and human testing protocols, agency delays, and high costs not currently in the marijuana business's budget.

Rescheduling could also change the marijuana retailer's relationship with its patient customers. Before the product reaches a consuming patient, a medical doctor's visit (in person or virtual) and the MD's prescription are required, and the patient must have the script filled by a DEA-registered pharmacist. Post-rescheduling, bud tenders may become obsolete, having been replaced by the doctor and/or the pharmacist. Think, going to Costco for your weed rather than engaging in an educational conversation with a compassionate budtender. This could fundamentally change the patient experience, shifting distribution from dispensary-based models to more traditional pharmacy-driven systems.

Rescheduling by federal agencies and/or Congressional updating of the definition of hemp-derived cannabinoid products could clarify appropriate uses for consumers and medical professionals of those products, but that clarity could also federally legalize the sales of those products by convenience stores, gas stations, vape shops, CBD stores, and beverages retailers. Current efforts at the state level to curb or eliminate sales of these products have closed such retailers or required removal of those products. Rescheduling and/or redefining hemp-derived and CBD products could mean your favorite Circle K store can sell or reintroduce these products, but more retailers means more competition and less revenue to state-licensed retailers.

Rescheduling will be messy and uncertain. So, what should dispensaries do now?

• Monitor federal agency activity from the FDA and DEA.
• Evaluate how rescheduling could affect tax planning, banking relationships, insurance coverage, and compliance obligations.
• Consider whether existing business models or product lines may need to be adapted over time.

We will continue to monitor developments and provide updates as the regulatory process evolves. In the meantime, our attorneys are available to answer questions about how this Executive Order may impact your business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.