Federal cannabis policy is entering a new phase. The Trump administration’s executive order to reclassify marijuana under the Controlled Substances Act (CSA) marks a historic shift with broad implications for compliance, research, and business strategy. While implementation details remain uncertain, stakeholders should prepare for evolving federal requirements.
On December 18, 2025, US President Donald Trump signed Executive Order 14370 instructing the attorney general to expedite the rescheduling of cannabis under the CSA. The executive order calls for moving cannabis from Schedule I, where it has remained since 1970 alongside heroin, to Schedule III, a category reserved for substances with accepted medical uses and lower abuse potential, such as ketamine and testosterone. The most significant changes in connection with the rescheduling involve medical use, US Food and Drug Administration (FDA) approval, prescription availability, CSA registration, research oversight, and manufacturing and distribution.
This move follows earlier efforts to reschedule cannabis. In May 2024, the US Department of Justice (DOJ) issued a proposed rule to shift marijuana to Schedule III, but a US Drug Enforcement Administration (DEA) administrative law judge cancelled the related hearing in January 2025, pending appeal. That delay left the decision to the Trump administration, culminating in the current executive order. See our prior client alert for an in-depth analysis of previous developments.
Recent congressional action signals that cannabis rescheduling is likely to move forward. The final Fiscal Year 2026 appropriations bill for the US Departments of Commerce and Justice, the Office of Science and Technology Policy, and related agencies, released on January 5, 2026, removed language that would have blocked DOJ from using funds to reclassify cannabis, preserving the executive branch’s authority to act. Combined with President Trump’s directive to expedite rescheduling, these developments suggest meaningful progress toward shifting cannabis to Schedule III. While the timing and scope of implementation remain uncertain, stakeholders should anticipate changes that could affect compliance obligations, tax planning, and research opportunities, and begin evaluating strategies now.
The US Senate’s recent confirmation of Sara Carter Bailey as director of the Office of National Drug Control Policy signals continuity in the administration’s drug policy agenda. Bailey will play a central role in implementing reforms related to cannabis rescheduling and broader controlled-substance policy.
Rescheduling cannabis from Schedule I to Schedule III would be a major policy change, but it would not make state medical or recreational programs compliant with federal law. Schedule III drugs can be prescribed if approved by the FDA, but cannabis is not yet FDA approved. If approval occurs, businesses must register with the DEA and follow federal controlled-substance rules. Patients would also need valid prescriptions. These requirements differ from most state programs. Overall, the rescheduling does not unify state and federal systems. Instead, it creates a separate FDA and DEA pathway that requires its own compliance planning.
Rescheduling could ease some research barriers because Schedule III substances face less stringent CSA registration requirements than Schedule I. However, specialized procedures under the Medical Marijuana and Cannabidiol Research Expansion Act would still apply.
While rescheduling reduces certain restrictions compared to Schedule I, substantial federal requirements remain. The table below summarizes key differences between Schedule I and Schedule III.
Rescheduling cannabis to Schedule III would create a separate FDA and DEA pathway with compliance obligations distinct from state requirements. Stakeholders should anticipate:
McDermott Will & Schulte will continue to track developments related to cannabis rescheduling and provide guidance on navigating this evolving regulatory landscape.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.
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