Rescheduling marijuana from Schedule I to Schedule III would not legalize all marijuana, but it would change its legal and medical status in several concrete ways:
• Federal recognition of medical use: Schedule III substances are defined as having an accepted medical use, unlike Schedule I. HHS’s 2023 evaluation concluded marijuana has a currently accepted medical use for pain, anorexia related to certain conditions, and chemotherapy‑induced nausea and vomiting, which underpins Schedule III placement.
• Criminal law: Unauthorized manufacture, distribution, and possession would still be federal crimes, but penalties tied specifically to Schedule I status would no longer apply; marijuana offenses would be treated like other Schedule III offenses under the Controlled Substances Act (CSA).
• Research: Researchers would no longer need Schedule I registrations and the extra security and approval layers that now apply to marijuana studies. Research could proceed under the less burdensome Schedule III framework, which HHS and DOJ say is intended to expand medical marijuana and CBD research.
• Medical handling: Like other Schedule III drugs, marijuana products approved or otherwise lawfully marketed under federal law would be subject to DEA registration, recordkeeping, and prescription rules (for example, prescriptions could be refilled up to five times within six months under 21 C.F.R. §1306.22) rather than the near‑total prohibition attached to Schedule I.
• Taxes for businesses: Internal Revenue Code §280E blocks ordinary business deductions for those trafficking in Schedule I or II drugs. Moving marijuana to Schedule III would remove marijuana businesses from §280E, allowing normal federal income‑tax deductions and credits for legal cannabis businesses, though this directly affects industry finances more than patients.
State medical and adult‑use marijuana programs would still technically conflict with federal law unless Congress changes the CSA, but rescheduling lowers federal barriers around research, medical use recognition, and taxation.
Rescheduling mainly changes what is possible under federal law; actual prescribing and coverage will depend on how FDA and payers act afterward.
Doctors’ prescribing vs. recommending • Today, physicians cannot lawfully prescribe marijuana under federal law because Schedule I drugs have no accepted medical use. They can only “recommend” or discuss marijuana under state programs, protected as free speech in cases like Conant v. Walters in the Ninth Circuit. • As a Schedule III drug, marijuana could, in principle, be prescribed like other Schedule III substances (e.g., certain codeine or ketamine products), but only for products that are lawfully approved or listed under the Food, Drug, and Cosmetic Act and registered with DEA. • Until FDA‑compliant marijuana drug products actually exist (e.g., specific formulations approved as drugs), doctors’ day‑to‑day ability in most states will still look like “recommending” state‑program cannabis rather than writing standard DEA prescriptions.
Insurance (including Medicare and Medicaid) • Medicare and Medicaid generally cover FDA‑approved outpatient prescription drugs. For Medicare Part D and Medicaid’s drug rebate‑program drugs, FDA approval and proper listing are key prerequisites. • While marijuana remains Schedule I, Medicare explicitly does not cover state medical marijuana. • After rescheduling, if FDA approves specific marijuana‑based drugs for labeled uses and manufacturers participate in required rebate/coverage frameworks, those particular products could become eligible for coverage under Medicare Part D and state Medicaid formularies, subject to usual plan and prior‑authorization rules. Rescheduling alone does not force plans to cover whole‑plant dispensary cannabis. • Private insurers would similarly be more able—but not required—to cover FDA‑approved marijuana‑derived medicines once they are Schedule III.
So, rescheduling is a necessary but not sufficient step: it clears the legal barrier that currently prevents federal prescribing and coverage, but prescribing and reimbursement will expand meaningfully only as specific cannabis products go through FDA pathways and payer coverage decisions.
The executive order directs the Attorney General to finish the pending rescheduling rulemaking “expeditiously,” but it does not fix exact dates. The process is governed mainly by 21 U.S.C. §811 and DEA’s regulations:
• Proposed rule already issued: DOJ/DEA published its Notice of Proposed Rulemaking (NPRM) on May 21, 2024 in the Federal Register, proposing to move marijuana from Schedule I to Schedule III and inviting comments and hearing requests. • Comment and hearing requests: The NPRM set deadlines for public comments and for requesting an administrative hearing under 21 C.F.R. §§1308.44 and 1316.47–1316.49. Nearly 43,000 comments were filed, and DEA has acknowledged that the scheduling action is a “formal rulemaking on the record after opportunity for a hearing” under the Administrative Procedure Act. • Administrative law hearing: If hearing requests are granted, an Administrative Law Judge (ALJ) takes evidence and arguments from DEA and other parties. The ALJ then issues a recommended decision and findings of fact. • Final rule by the Attorney General/DEA: After the hearing record closes and the ALJ recommendation issues, the Attorney General (delegated to DEA) reviews the record, makes the final scheduling determination under 21 U.S.C. §811, and publishes a final rule in the Federal Register with an effective date.
Timelines for the ALJ hearing, the ALJ’s recommendation, and the final rule are not specified in statute and historically can range from months to years. As of late 2025, the precise schedule for the marijuana hearing and final rule has not been set publicly, so only the sequence—not the dates—can be described with confidence.
“Final hemp‑derived cannabinoid products” are not yet defined in detail in statute; the executive order is asking Congress to refine that definition. Today:
• The 2018 Farm Bill defines “hemp” as cannabis and derivatives with no more than 0.3% delta‑9 THC on a dry‑weight basis. Anything above that threshold is “marijuana” under the CSA. • Many commercial products (oils, gummies, drinks, vapes) are made from hemp extracts but can still deliver substantial milligrams of THC per serving even if the overall product meets the 0.3% dry‑weight test.
The order’s reference to “final hemp‑derived cannabinoid products” is aimed at the finished consumer products (e.g., a bottle of gummies or a tincture) rather than just raw plant or crude extract. Changing the statutory definition in the ways described in the order—such as setting: • maximum milligrams of THC per serving, • per‑container THC caps, and • possible CBD:THC ratio requirements,
would likely: • Keep clearly low‑THC, predominantly CBD products (with very low THC per serving and low total per container) on the hemp/over‑the‑counter side; but • Reclassify some “full‑spectrum” or intoxicating hemp‑derived products with higher THC content as “marijuana,” making them controlled substances unless handled through CSA‑compliant channels.
Because Congress has not yet passed the requested statutory changes, the precise boundary lines and which current CBD or hemp products would remain available outside the CSA are still uncertain.
“Real‑world evidence” (RWE) means clinical evidence about a medical product’s use, benefits, and risks that is derived from “real‑world data” (RWD)—information collected outside traditional randomized clinical trials. RWD sources include electronic health records, medical claims and billing data, product and disease registries, and data from routine clinical practice.
FDA and HHS have a formal RWE framework, under which RWD and RWE can be used to support regulatory decisions such as new indications for approved drugs, post‑market safety evaluation, and sometimes approval of new products.
Under the executive order, HHS, FDA, CMS, and NIH are directed to develop research methods and models that use RWE to study medical marijuana and CBD. In practical terms, that likely means: • Using Medicare, Medicaid, and other claims/EHR data to see how patients are actually using cannabis or CBD and to measure outcomes (e.g., pain control, opioid use reduction, adverse events). • Designing observational studies, pragmatic trials, and registries in real‑world settings to assess effectiveness and safety for specific conditions. • Feeding those findings into FDA standards of care, labeling, and product‑safety guidance, and into CMS coverage and payment policies.
RWE methods would therefore complement traditional trials by making use of large, real‑world patient datasets to answer questions about how marijuana and CBD work in everyday medical practice.
The order says the White House and Congress should update the statutory definition of final hemp‑derived cannabinoid products, including guidance on: • milligrams of THC per serving, • per‑container THC limits, and • CBD:THC ratio requirements.
Determination • Congress would set the basic legal framework; FDA, in consultation with HHS and possibly state experience, would likely recommend specific numeric limits based on toxicology, impairment, pediatric‑exposure risks, and existing state standards. • Many state cannabis programs already cap edibles at 10 mg THC per serving and 100 mg per package, which provides a real‑world reference point for federal limit‑setting. • Scientific and clinical data about impairment thresholds and adverse events, especially in children, would inform both maximum THC per serving/container and required CBD:THC ratios for products that remain in the “hemp” category.
Enforcement • Once limits are in statute or FDA/DEA regulation, products exceeding those thresholds would be treated as controlled “marijuana” under the CSA, subject to DEA registration, state controlled‑substance laws, and potential criminal/civil penalties for unauthorized manufacture or sale. • FDA would enforce misbranding and adulteration provisions under the Food, Drug, and Cosmetic Act for consumer products that misstate THC content or violate serving‑size rules. • States could align their own licensing and testing requirements with the new federal thresholds for both hemp and cannabis products.
Until Congress acts, this guidance framework is prospective; the exact numbers and mechanisms will depend on the final legislation and any implementing FDA/DEA regulations.
FDA and other agencies have already begun addressing mislabeling and safety problems with CBD and hemp‑derived products, and the executive order directs further action. Key steps include:
• Enforcement against illegal CBD claims and unsafe products: FDA has issued numerous warning letters to companies marketing CBD or other hemp‑derived products with unapproved disease‑treatment claims, or in forms that pose particular safety risks (e.g., products appealing to children, “eye‑drop” or injectable CBD, or products containing delta‑8 THC). • Focus on mislabeling and contaminants: FDA and independent analyses have repeatedly found that many CBD products are mislabeled as to CBD and THC content and may contain contaminants such as heavy metals or pesticides. FDA has used warning letters and consumer updates to highlight these risks and to pressure firms to improve testing and labeling. • Regulatory pathway development: FDA has stated it is working to clarify how cannabis‑derived ingredients like CBD can be safely used in foods, supplements, and other products, including potential new legal frameworks beyond existing drug and supplement categories. • Coordination with HHS, CMS, and NIH as directed by the order: expanded research and better real‑world data will support more precise safety standards, labeling rules (including THC and other cannabinoid disclosures), and possibly mandatory testing requirements or limits for certain product categories.
Collectively, these actions aim to reduce inaccurate labeling, remove the riskiest products from the market, and move CBD and related products toward more standardized composition, testing, and labeling comparable to other regulated consumer health products.