Understanding Trump's Marijuana Rescheduling Executive Order
What It Does and What Comes Next
December 18, 2025
President Trump signed an executive order today directing federal agencies to complete the rescheduling of marijuana from Schedule I to Schedule III under the Controlled Substances Act. While this represents a significant shift in federal drug policy, the actual impacts are more nuanced than many headlines suggest. This post breaks down what the order actually does and explores the complex implications for states without medical programs and federally regulated workers.
What the Executive Order Actually Does
The executive order, titled "Increasing Medical Marijuana and Cannabidiol Research," accomplishes several specific things:
1. It expedites the Rescheduling Process
The order directs the Attorney General to complete the already-underway rulemaking process to move marijuana from Schedule I to Schedule III "in the most expeditious manner." This doesn't create new policy from scratch—it accelerates a process that began under the Biden administration in 2023, when the Department of Health and Human Services recommended rescheduling after finding scientific support for marijuana's medical use in treating pain, anorexia, and chemotherapy-induced nausea.
The DEA proposed this rescheduling rule in May 2024, received over 42,000 public comments, and has been awaiting an administrative law hearing. Trump's order essentially tells federal agencies to finish what was started. And to do it quickly. How quickly is unknown, but likely several months.
2. Recognizes Medical Use
The order formally acknowledges what 40 states and DC already recognize: marijuana has accepted medical uses and therefore doesn't meet the definition of a Schedule I drug. The order cites FDA findings that support marijuana's use for treating specific conditions, noting that over 30,000 licensed healthcare practitioners across 43 jurisdictions currently recommend medical marijuana to more than 6 million registered patients for at least 15 medical conditions.
The policy rationale emphasizes chronic pain management, noting that nearly one in four U.S. adults and more than one in three seniors suffer from chronic pain, with 60% of medical marijuana users reporting they use it to manage pain. The order also references research showing that 20% of participating veterans used fewer opioids as a result of medical marijuana use.
3. Addresses CBD Products
Beyond marijuana itself, the order tackles the confusing legal landscape around hemp-derived CBD products. It directs the administration to work with Congress to update the statutory definition of hemp-derived cannabinoid products, specifically to:
Allow Americans access to appropriate full-spectrum CBD products
Develop guidance on THC limits per serving and per container
Establish CBD to THC ratio requirements
Create a regulatory framework for these products
This is significant because current law creates ambiguity. Some full-spectrum CBD products containing THC above certain thresholds will become controlled as marijuana under recent legislation, while others remain legal as hemp products. The order seeks to clarify this gray area.
4. Prioritizes Research Infrastructure
Perhaps most importantly from a long-term perspective, the order emphasizes expanding research capabilities. It directs HHS, the FDA, the Centers for Medicare and Medicaid Services, and the National Institutes of Health to develop research methods utilizing "real-world evidence" to improve access and inform standards of care.
The order acknowledges a critical gap: only 56% of older Americans using marijuana have discussed it with their healthcare provider, creating potential risks for drug interactions and adverse events, particularly for seniors on multiple medications.
What the Executive Order Does NOT Do
It's equally important to understand what this order doesn't accomplish:
It does not legalize recreational marijuana at the Federal level. Marijuana remains illegal for non-medical use under federal law.
It does not immediately change marijuana's legal status. The rescheduling must still go through the formal rulemaking process, which could take months.
It does not override state laws that prohibit marijuana. States retain their authority to maintain stricter policies than federal law.
It does not create rights or benefits that individuals can enforce in court (the order explicitly states this in its general provisions).
It does not resolve the banking issues facing cannabis businesses, which would require separate congressional action.
That’s it on the Executive Order. Next, we’ll explore what happens when the change to Schedule III actually takes place.
The Schedule III Impact: What Really Changes?
Moving marijuana from Schedule I to Schedule III creates a fundamental shift in how the federal government views the substance, but the practical implications are more limited than many assume.
Tax Relief
The most immediate and concrete benefit for the cannabis industry comes from federal tax treatment. Under IRC Section 280E, businesses dealing with Schedule I or II substances cannot deduct ordinary business expenses on their federal tax returns. This has created crippling tax burdens for state-licensed cannabis businesses, often resulting in effective tax rates above 70%.
Schedule III classification would allow these businesses to take normal business deductions for the first time, saving the industry billions of dollars and making many struggling businesses financially viable. This is why cannabis stocks surged on news of the executive order.
Research
Currently, marijuana's Schedule I status makes research extraordinarily difficult (we’d know). Gaize has conducted all of its cannabis research in Canada due to the high cost and severe restrictions of Schedule I drugs. Researchers have historically faced burdensome DEA requirements, limited access to cannabis for studies, and institutional barriers at universities and research hospitals. Schedule III status would significantly reduce these barriers, potentially enabling:
More robust clinical trials on potency, dosing and efficacy
Better understanding of drug interactions and side effects
Development of standardized pharmaceutical preparations
Research into specific populations (elderly, adolescents, pregnant women) and conditions
This research infrastructure could eventually lead to FDA-approved marijuana medications with clear prescribing guidelines—something that doesn't exist today despite widespread medical use.
What Doesn't Change
Several critical aspects of marijuana's legal status remain unchanged:
Federal criminal penalties for unauthorized possession and distribution remain on the books
Interstate commerce in marijuana remains prohibited
State-legal cannabis businesses still can't use FDIC-insured banking freely without additional legislation
Immigration consequences for marijuana use persist
Employment consequences in federally regulated industries remain complex (more on this below)
The Impact on States Without Medical Marijuana Programs
Forty states plus DC have state or locally-sanctioned regulated medical marijuana programs. That means ten states currently have no comprehensive medical marijuana program: Idaho, Kansas, Nebraska, Wyoming, South Carolina, Tennessee, Wisconsin, Indiana, Texas (which has a very limited low-THC program), and a few others with only restrictive CBD programs.
Federal Rescheduling Doesn't Override State Prohibition
Here's a critical point: Schedule III classification doesn't force these states to create medical marijuana programs or allow doctors to prescribe marijuana. Reclassifying cannabis from Schedule I to Schedule III does not provide state governments with the authority to establish marijuana regulations that are inconsistent with those established by the federal government.
However, states also aren't permitted to create regulations less restrictive than federal requirements for Schedule III substances. This creates an interesting legal tension.
The Practical Reality for Residents
For residents of states without medical programs, the rescheduling changes little in the short term:
Possession remains illegal under both state and federal law in their home state
Out-of-state medical recommendations don't provide legal protection when returning home
Interstate transport of marijuana remains federally prohibited, even if you have a medical recommendation from another state
Employment consequences persist under state law regardless of federal scheduling
The Potential Pressure for Change
That said, rescheduling could create political pressure on holdout states. If marijuana gains formal federal recognition as having accepted medical use, states maintaining blanket prohibition will increasingly appear out of step with both federal policy and the vast majority of other states.
Some state legislators who have opposed medical marijuana on grounds that it lacks federal recognition of medical value will lose that talking point. This could shift the political calculus, particularly in states where polling shows majority support for medical access.
Additionally, some state medical marijuana bills have included provisions making them contingent on federal rescheduling. Indiana, for example, had legislation introduced that would establish a medical program only if marijuana were removed from Schedule I. Rescheduling could automatically trigger such provisions where they exist.
The Research Gap Affects Everyone
Perhaps most importantly, residents of non-medical states would still benefit from the expanded research that Schedule III status enables. Better understanding of marijuana's medical effects, appropriate dosing, drug interactions, and side effects helps everyone—including doctors and patients in states that eventually adopt medical programs.
DOT and Federally Regulated Employees
The most immediate and serious safety concern arising from marijuana rescheduling involves the approximately 4 million Americans who work in safety-sensitive positions regulated by the Department of Transportation. This includes:
Commercial truck drivers (CDL holders)
Railroad employees
Transit operators
Pipeline workers
Aviation personnel
Maritime workers
DOT Testing Authority Is at Risk
The Federal government's drug testing program for DOT-regulated workers operates under regulations that tie testing requirements to substances controlled under Schedules I and II of the Controlled Substances Act. The Department of Health and Human Services establishes the mandatory testing guidelines, and DOT must follow them.
If marijuana is moved from Schedule I to Schedule III, HHS would no longer require testing for it, and the DOT would have to stop testing immediately.
This creates a critical problem: how do we keep roads and other modes of transportation safe in light of this change? Today, marijuana accounts for 60% of all positive tests in the FMCSA Drug and Alcohol Clearinghouse. Losing the authority to test for the single most commonly detected impairing substance among commercial drivers represents a major highway safety concern.
Impairment detection technology is here (ex. Gaize) that can step in to do actual impairment testing, allowing for safe use of THC by DOT regulated employees.
Without explicit language preserving DOT testing authority, moving marijuana to Schedule III could make it legally impossible for federal regulators to test commercial motor vehicle operators for THC.
The immediate operational chaos would be severe. Testing laboratories would need to redesign forms and panels. Medical Review Officers and Designated Employer Representatives might still process tests under outdated protocols. Employers could face legal liability for requiring tests that federal law no longer mandates. And drivers who have abstained from marijuana use might reasonably conclude it's now permissible.
Former Transportation Secretary Pete Buttigieg stated that DOT's understanding of rescheduling marijuana from Schedule I to Schedule III is that it would not alter DOT's marijuana testing requirements with respect to the regulated community. His reasoning: DOT regulations identify marijuana by name, not by reference to its schedule classification.
However, many legal experts and industry groups remain unconvinced. The American Trucking Associations has expressed "deep concern" about this interpretation and is demanding explicit statutory protection for continued testing authority.
The risk is that without clear legislative or regulatory action, DOT's position could be challenged in court, potentially creating a patchwork of circuit-by-circuit rulings that leave employers and drivers uncertain about their obligations.
The Safety Carve-Out Solution
Transportation industry groups, drug testing organizations, and safety advocates are calling for a formal "safety carve-out" in the rescheduling process. This would explicitly preserve marijuana testing requirements for safety-sensitive positions regardless of marijuana's scheduling status.
Such a carve-out would need to:
Grant HHS authority to continue testing and certifying labs for Schedule III substances when public safety demands it
Explicitly preserve DOT's marijuana testing mandate
Clarify that the change applies to current employees and new hires
Address state-level medical marijuana laws and workplace protections
Other Federally Regulated Zero-Tolerance Roles
Beyond DOT positions, marijuana rescheduling creates complex questions for other categories of workers subject to federal zero-tolerance policies:
Federal Employees with Security Clearances
Despite widespread legalization at the state level, federal policy has not changed. Clearance holders should not assume a Schedule III designation gives them a green light.
The fundamental issue: marijuana use remains federally illegal even at Schedule III, and security clearances are governed by federal standards, not state laws. Under Executive Order 12564, federal workplaces must remain drug-free. A history of marijuana use could still have a significant impact on security clearance holders, because it would remain illegal on a federal level.
Key points for clearance holders:
Past use isn't an automatic disqualifier but must be disclosed and can affect adjudication
Current use, even with a state medical card, violates federal policy
Lying about use is far more disqualifying than the use itself
Agency-specific policies may be stricter than general federal guidance
The nuance: Rescheduling could eventually make legal medical use with a prescription less problematic for clearance holders, similar to how prescribed Schedule III medications don't typically cause issues. However, this would require additional policy changes and wouldn't happen immediately upon rescheduling.
Military Personnel
Military members face the strictest policies. The Uniform Code of Military Justice treats marijuana use as a criminal offense regardless of state law or federal scheduling. Rescheduling to Schedule III doesn't change the military's authority to prosecute service members for marijuana use or possession.
For military personnel seeking security clearances, marijuana use creates compounding problems under both military justice and clearance adjudication standards.
Federal Contractors
Federal contractors' marijuana policies often mirror federal employee standards, particularly when performing work that requires security clearances or involves safety-sensitive functions. Rescheduling doesn't automatically change these contractual obligations.
Change is Coming
While Schedule III status doesn't immediately change these policies, it could begin a gradual evolution. As medical marijuana gains federal legitimacy, some agencies may eventually allow prescribed medical use similar to other Schedule III medications. But such changes would require:
Updates to agency-specific policies
Revisions to adjudicative guidelines
Development of standards for acceptable medical use
Protocols for documenting legitimate prescriptions
This evolution, if it happens at all, will likely take years and vary significantly across agencies and roles.
Progress (with Complications)
President Trump's executive order represents a historic shift in federal marijuana policy, but one that's more about enabling change than delivering immediate transformation. The rescheduling of marijuana to Schedule III:
Does accomplish:
Formal federal recognition of marijuana's medical value
Substantial tax relief for state-legal cannabis businesses
Dramatically improved research capabilities
Reduced stigma around medical marijuana use
A framework for regulating CBD products
Doesn't accomplish:
Federal legalization for recreational use
Automatic changes to state prohibition laws
Resolution of banking access issues
Immediate clarity for federally regulated workers
Protection from employment consequences in many contexts
Creates urgent questions about:
DOT drug testing authority and transportation safety
Security clearance policies and federal employment
The patchwork of state-federal legal conflicts
Interstate commerce and banking regulations
For the millions of Americans living in states without medical marijuana programs, rescheduling changes little immediately but may increase political pressure for reform. For the millions working in federally regulated safety-sensitive positions, rescheduling creates urgent uncertainty that demands swift clarification to protect public safety while respecting legitimate medical use.
The executive order signed today launches a process, not a resolution. As the DEA completes its rulemaking, Congress considers complementary legislation, and federal agencies update their policies, the real impacts of this historic change will gradually become clear. What's certain is that the federal government's 50-year stance on marijuana has fundamentally shifted—even if the practical implications will take years to fully unfold.
How Impairment Detection Technology Can Help
Reclassification of cannabis to Schedule III would fundamentally change the legal and regulatory landscape by acknowledging accepted medical use, but it would not resolve the core challenge facing employers, regulators, and safety-sensitive industries: distinguishing lawful use from unsafe impairment. As medical cannabis access expands under a Schedule III framework, traditional drug testing methods that detect the presence of THC or its metabolites become increasingly misaligned with both science and fairness, since they cannot reliably indicate current impairment. This creates heightened risk for employers attempting to balance workplace safety obligations with employee rights and evolving medical standards.
Impairment detection technology directly addresses this gap by shifting the focus from what substance is in the body to whether an individual is functionally impaired at the time of assessment. By measuring objective, physiological indicators of impairment—rather than relying on per se concentration thresholds—these technologies provide defensible, real-time evidence of fitness for duty. In a Schedule III cannabis environment, impairment detection enables employers to maintain rigorous safety standards, reduce legal exposure, and support responsible medical cannabis use, all while aligning with modern regulatory expectations that prioritize actual impairment over historical drug exposure.
Gaize is the leading impairment detection technology. We’ve conducted the world’s largest cannabis impairment clinical trial and are in use today by leading businesses across safety sensitive industries.
