Cannabis Rescheduling Explained: What We Know, What We Don’t, and What’s Next

Last week, President Trump made history when he signed an executive order (EO) directing the Attorney General to expedite the process of reclassifying cannabis to Schedule III and removing barriers to research to “increase medical marijuana and CBD research to better inform patients and doctors.” 

There’s no disputing that this is a game-changing moment for the cannabis industry and how the plant is viewed writ-large, but there’s still many questions and unknowns. Let’s take a look at some of the most frequently asked questions I’m getting about what’s next and what it all means:

What Did the Cannabis Rescheduling Executive Order Actually Say?

The EO directs the Attorney General to expedite completion of the process of rescheduling marijuana to Schedule III of the Controlled Substance Act (CSA). It also directs the White House Deputy Chief of Staff for Legislative, Political, and Public Affairs to work with the Congress to allow Americans to benefit from access to appropriate full-spectrum CBD products while still restricting the sale of products that pose serious health risks. Additionally, the EO directs the Department of Health and Human Services (HHS) to develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products in accordance with Federal law and to inform standards of care.

When Will Cannabis Rescheduling to Schedule III Take Effect?

What This Means for 280E Relief and Cannabis Businesses

The truth is, we really don’t know. There is no deadline, and we know that it will be at least 30 days due to the Administrative Procedure Act (APA). As of publication, the Attorney General has not filed any type of final rule and neither the DEA nor the DOJ has responded to the public comments that were received on the proposed rule in 2024.

We also have to consider litigation that will surely be filed by our opponents. For instance, Smart Approaches to Marijuana (commonly known as Project SAM) had already stated that they plan to file against the Administration (likely on procedural grounds). 

The APA establishes the framework for judicial review of agency actions and while the APA itself does not specify a statute of limitations for general review, the default period for a civil action against the United States is generally six years after the claim first accrues, however, specific statutes for judicial review of certain agency actions may impose shorter deadlines, sometimes requiring a petition to be filed within 30 days after the final agency action. 

In short, we have to wait and see (frustrating, I know!). 

How Cannabis Rescheduling to Schedule III Affects Banking

A move to Schedule III does not solve the cannabis industry’s banking problems completely. Such a move would/will likely result in lower perceived legal risk for banks, more compliance comfort, expanded access to traditional services, and possibly even improve capital markets access; but it would/will not provide safe harbor for cannabis businesses or automatically change FinCEN guidance. That’s why it’s more important now than ever that we continue to advocate for the introduction and passage of bills like the SAFER Banking Act and the CLAIM Act.

NCIA’s Position on Cannabis Rescheduling to Schedule III

NCIA supports President Trump’s decision to officially direct the Attorney General to reclassify cannabis as a Schedule III substance. Medical professionals, patients, and millions of Americans have long understood that cannabis has accepted medical use and does not belong in the same category as the most dangerous controlled substances. By taking this step, the Administration is recognizing the realities of today’s regulated markets and the work states have done to responsibly oversee them.

That said, Schedule III cannot be the final word. NCIA urges policymakers to build on today’s decision by establishing a framework that respects states’ rights, supports responsible operators, and provides clear federal enforcement guidelines in order to provide certainty to the thousands of businesses operating openly and in compliance with state law. NCIA will continue working to ensure that this industry can thrive under policies that are fair, consistent, and reflective of modern realities.

After more than half a century of prohibition, the importance of this moment cannot be understated- but our association knows that this is just the beginning of a new day for cannabis. As we close out the year, NCIA is thankful to our members for their support and urges those of you who aren’t members to join today or make a donation. Together, we’ll continue to move this industry forward and ensure that progress continues in Washington, DC and beyond. 

Wishing you and yours a wonderful holiday season and happy new year!