Trump’s Executive Order Pushes Marijuana Toward Schedule III: Wide-Ranging Impacts on Industry and Society

Trump’s Executive Order Pushes Marijuana Toward Schedule III: Wide-Ranging Impacts on Industry and Society

By MetroBud NYC Team | December 21, 2025

Executive Order Accelerates Federal Shift

WASHINGTON — President Donald Trump signed an executive order on December 18, 2025, directing the Attorney General and the Drug Enforcement Administration (DEA) to expedite the rescheduling of marijuana from Schedule I to Schedule III under the Controlled Substances Act. This move, aimed at increasing medical research on marijuana and cannabidiol, marks a significant step in federal drug policy reform, though the rescheduling process remains ongoing.

The order acknowledges marijuana’s potential medical benefits while maintaining strict federal controls. It does not legalize recreational use nationwide but could pave the way for tax relief, expanded research, and reduced barriers for legal cannabis operations. Industry experts and stakeholders have reacted with a mix of optimism and caution, noting potential growth opportunities alongside persistent regulatory challenges.

Historical Evolution of Marijuana Policy

Cannabis has a long history of medicinal and recreational use dating back thousands of years. In the United States, it remained largely unregulated until the early 20th century, when states began imposing restrictions often tied to anti-immigrant sentiments.

The Marihuana Tax Act of 1937 introduced federal taxes and regulations, effectively criminalizing the substance. This was followed by the Controlled Substances Act of 1970, which classified marijuana as a Schedule I drug, indicating high abuse potential and no accepted medical use, placing it alongside heroin and LSD.

Decades of advocacy and state-level changes ensued. From the 1990s, states like California legalized medical marijuana, creating a patchwork of laws conflicting with federal policy. The early 21st century saw further shifts, with Colorado and Washington’s 2012 recreational legalization marking a turning point and pressuring federal reform.

Timeline of Rescheduling Efforts

The path to rescheduling has been methodical, with recent acceleration via the executive order. Below is a detailed chronology based on official announcements and policy developments.

This timeline underscores the prolonged bureaucratic process now hastened by presidential intervention. Future milestones hinge on agency compliance and potential legal hurdles.

In-Depth Breakdown of Implications

If finalized, rescheduling would enhance access to banking services for cannabis businesses, reducing risks and enabling standard financial operations. It would also provide relief from Section 280E tax restrictions, allowing deductions for operating expenses and improving profitability.

Criminal penalties for possession and distribution would persist but potentially lessen in severity. Employment policies might evolve, with possible ADA protections for medical users complicating drug testing.

International trade and exports remain limited by treaties, though medical products could see opportunities. FDA regulation would intensify for products making medical claims, raising compliance costs but ensuring quality.

Government funding for research would increase, facilitating more studies on efficacy and risks. Health insurance might begin covering prescriptions, expanding access for patients.

Interstate commerce restrictions would continue, but discussions could open for future allowances. Past convictions may not be expunged automatically, leaving judicial impacts uncertain.

National security clearances could still be affected by use, albeit less harshly. Federal oversight would shift toward a regulated medical framework.

The pharmaceutical industry might intensify involvement with patented products, competing against natural cannabis. Quality control standards could improve product safety nationwide.

Recreational use remains federally illegal, maintaining state-federal tensions. Social equity programs may expand to address drug war disparities.

Transportation regulations would prohibit unlicensed movement, with evolving DOT rules. Universities could access more funding for studies without prior barriers.

Veterans might gain easier VA prescriptions. Workplace safety concerns, like impairment, would persist under OSHA.

Historical biases in prohibition could be partially addressed, promoting equity. Youth protection measures, including age restrictions and education, are expected to strengthen.

Local zoning regulations would continue to govern dispensary locations, preserving community control.

Effects on Consumers

Consumers could benefit from validated medical access and potential insurance coverage, leading to safer, regulated products and reduced stigma. However, federal recreational prohibitions persist, possibly driving up prices through new taxes and compliance. Interstate purchases remain limited, and employment risks endure for users.

Medical patients may see treatments for conditions like chronic pain legitimized, while recreational users in legal states gain from market stability but face ongoing federal travel and banking hurdles.

Impacts on Small Businesses

Local dispensaries and small operators anticipate tax deductions boosting margins and better banking reducing cash-only vulnerabilities. Research collaborations could spur innovation.

Yet, FDA compliance costs might strain resources, and market saturation from larger competitors poses risks. In non-legal states, federal enforcement could intensify, hindering operations.

Consequences for Medium to Large Businesses

Larger multi-state operators are poised for gains through stock market access, investor influx, and scaled advertising. International expansions become feasible.

Drawbacks include heightened FDA scrutiny, antitrust concerns from mergers, and reliance on policy stability. Past operational lawsuits could arise.

Repercussions for the Underground Market

Illegal dealers, or trappers, face increased competition from legal channels, potentially reducing market share. Equity programs might aid transitions to legitimacy, with slightly reduced penalties.

Nevertheless, the black market may endure in underserved regions for untaxed goods, though overall volume could decline, pushing participants toward riskier endeavors.

Broader Societal and Economic Ramifications

Social justice advances by addressing disparities, though criminalization lingers. Economic projections forecast billions in revenue and jobs, but uneven distribution risks bubbles.

Health research could uncover benefits and risks, informing policies. Environmental regulations might promote sustainable cultivation, mitigating illegal grow damages.

Internationally, the U.S. aligns with global trends but navigates UN treaty conflicts.

Outlook and Expert Insights

By 2027, debates on full descheduling may intensify. Businesses are advised to prepare for audits, while consumers push for comprehensive reform. Political shifts could delay or reverse progress, warranting caution.

For ongoing cannabis updates, visit MetroBud NYC.