Articles
2 min read
A New Era for Cannabis: Executive Order Launches Path to Schedule III
On December 18, 2025, President Trump signed an Executive Order directing the Attorney General to expedite rescheduling marijuana to Schedule III under the Controlled Substances Act. This marks a historic shift in federal policy and sets the stage for significant changes in research, compliance and taxation.
Key Points from the Executive Order
- Rescheduling to Schedule III will recognize marijuana’s accepted medical use and remove major barriers to research. This is expected to rollout in the first half of 2026, barring possible delays by any legal challenges.
- Expanded research initiatives will leverage real-world evidence to inform standards of care for medical marijuana and CBD products.
- Improved access to hemp-derived cannabinoid products is a priority, with legislative and regulatory pathways under development.
What the Hemp? Podcast
What the Hemp? is a podcast series that explores the ever-evolving cannabis industry, offering insights and discussions to help industry professionals grow their knowledge.
What This Means for Your Cannabis Business
- Section 280E remains in effect for now. Until the DEA completes the rescheduling process and publishes a final rule, cannabis businesses cannot deduct ordinary business expenses on federal returns.
- The Executive Order may provide the following:
- Guidance to the Attorney General to expedite Rescheduling. The effective date of the Rescheduling is uncertain but expected to occur in the first half of 2026.
- A path to amend prior year returns and further strengthen the non-280E position for clients who have already claimed it.
- A new pathway for Hemp-Derived Cannabinoids products to survive.
Recommendations
- Continuing current tax planning under existing 280E restrictions.
- Monitoring developments closely – DEA rulemaking and IRS guidance will determine timing and scope of tax changes.
- Schedule a strategy session to review potential impacts on your financial and compliance roadmap. We have a vision for actions that cannabis operators should address post-rescheduling to minimize taxation.
We will keep you informed as soon as formal guidance is issued. This move aims to be a positive step forward for the cannabis industry.