Image Source: CNBC
In a significant shift regarding U.S. cannabis policy, President Donald Trump signed an executive order on December 18, 2025, directing federal agencies to reclassify marijuana from Schedule I to Schedule III. This monumental decision marks the biggest federal cannabis reform in over half a century, potentially reshaping the landscape of cannabis access and research.
Changes Under Trump’s Executive Order on Cannabis
The reclassification evolves marijuana’s status from the most restrictive category under the Controlled Substances Act—where it was grouped with drugs like heroin and LSD—to a classification that acknowledges its medical use, similar to ketamine and Tylenol with codeine.
During the announcement, Trump emphasized that this change stems from the urgent requests of American patients suffering from a range of debilitating health issues, including veterans with service-related injuries and seniors dealing with chronic illnesses. He stated, “This action has been requested by American patients suffering from extreme pain, incurable diseases, and more.”
New Opportunities for Medicare Patients
In conjunction with this reclassification, the Centers for Medicare and Medicaid Services, spearheaded by Dr. Mehmet Oz, is slated to launch a pilot program allowing Medicare-covered seniors to receive free, doctor-recommended CBD products. This initiative aims to integrate cannabis-derived therapies into federally insured healthcare for the first time, pending local and state compliance.
Although the announcement has led to varying reactions in the cannabis market, major cannabis conglomerates are feeling the effects. Stocks of Tilray Brands showed a 6% increase, while competitors like Trulieve and Green Thumb Industries experienced declines of approximately 15% and 5%, respectively, following the news. The AdvisorShares Pure US Cannabis ETF, tracking American cannabis operators, also dropped over 10%.
Financial Implications for the Cannabis Industry
Analysts view this reclassification as a significant financial relief for the cannabis industry. Companies can now benefit from exemptions under IRS Code Section 280E, which previously barred cannabis businesses from deducting ordinary business expenses like rent and payroll. With this change, cannabis firms can now access banking services and institutional capital that had been largely unattainable due to regulatory fears.
Wall Street experts suggest that the Medicare pilot combined with the reclassification could attract major pharmaceutical companies keen on entering the sector to capture federally insured revenue streams.
While there is widespread enthusiasm about these developments, experts note that the FDA has yet to fully endorse CBD, despite its rising popularity. Research indicates inconsistent benefits for various conditions, with some studies warning about possible liver toxicity and interactions with other critical medications.
What’s Next in Cannabis Policy?
Despite the reform, Trump clarified, “I want to emphasize that the order … doesn’t legalize marijuana in any way, shape or form, and in no way sanctions its use as a recreational drug.” This distinction is crucial as the cannabis debate continues to evolve in the U.S.
As time goes on, the reclassification is expected to foster further research into the effects of CBD and cannabis more broadly. Many industry insiders view this as merely the starting point for a more in-depth exploration of cannabis’s medical benefits moving forward.
The Future of Cannabis Research and Policy
Experts are hopeful that the executive order will pave the way for more extensive studies into marijuana’s therapeutic effects. The demand for research could lead to a comprehensive understanding of the plant, ultimately benefiting patients nationwide.
FAQs
What does Trump’s executive order on cannabis mean for patients?
The executive order reclassifies marijuana, allowing for greater access to medical cannabis for patients in need, particularly seniors.
How will this impact the cannabis industry financially?
The reclassification will allow cannabis companies to deduct ordinary business expenses and access banking services, positively impacting their financial standing.
Is marijuana legalized for recreational use now?
No, the order does not legalize marijuana or sanction its use as a recreational drug in any capacity.
What are the implications for Medicare patients?
Medicare patients may soon be able to obtain free, doctor-recommended CBD products through a new pilot program set to launch in April.
Are there concerns about CBD products?
Yes, despite its popularity, the FDA has raised concerns about the safety of prolonged CBD use and potential interactions with other medications.
