President Trump has indicated he may ease federal restrictions on marijuana, specifically by rescheduling cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA). This would be the first move his administration has made towards its campaign promise to “unlock the medical uses” of cannabis and bolster federal reform.
Reports on this potential determination surfaced after a private $1 million-per-plate fundraiser at Trump’s New Jersey golf club. In attendance were several Cannabis Industry stakeholders, including Kim Rivers, CEO of Trulieve, one of the largest U.S. cannabis companies. According to the Wall Street Journal and CNN, Trump made pledges regarding cannabis reform during the event. He also addressed the topic more publicly during a subsequent White House press conference on August 11, noting that a determination on rescheduling would be made “over the next few weeks.” However, he cautioned, no final decision has been reached, acknowledging both the good — potential medical benefits — and the bad — the risks associated with cannabis use.
Of note, campaign contributions from the cannabis industry may have influenced or encouraged this development. Federal campaign finance records show that Trulieve alone donated $750,000 to Trump’s inauguration, and other industry groups together have contributed millions as well. Additionally, polls indicate that approximately 70% of U.S. adults support federal cannabis rescheduling, making this an important consideration for Trump as the 2026 midterm elections approach.
The proposed change would reclassify cannabis from Schedule I to Schedule III, recognizing its accepted medical uses. Federally, the United States regulates cannabis as a Schedule I drug under the CSA. Presently, cannabis is in a more restrictive category than cocaine, which is in Schedule II. Schedule I substances are considered to have a high potential for abuse, with no currently accepted medical use in the United States. The CSA prohibits the manufacture, distribution, sale, and possession of Schedule I substances, with limited exceptions for medical and scientific purposes, tremendously limiting the growth of the cannabis industry even with a majority of states having legalized medical, recreational, or both.
Under current law, the DEA controls the rescheduling process. While the rescheduling process was initiated during the Biden administration, it was stayed due to an interlocutory appeal. Analysts believe that a presidential directive would strongly influence DEA action, despite the current leadership's known skepticism.
What Rescheduling Cannabis Would Mean
Federal rescheduling would not legalize cannabis outright, but it could significantly reduce regulatory burdens. Some licensed cannabis businesses could receive federal tax relief, including the ability to deduct ordinary business expenses such as payroll, rent, and utilities under Section 280E of the Internal Revenue Code. Outdated federal restrictions that have limited scientific research could also be eased. The potential shift has already had market impacts: following the news, shares in publicly traded cannabis companies, including Trulieve, surged sharply.
An often overlooked but serious consequence of moving cannabis to Schedule III is that it would place the industry squarely within FDA’s jurisdiction. Under the Food, Drug & Cosmetic Act, any drug marketed for human consumption must be FDA-approved, manufactured in compliance with current good manufacturing practices, and labeled in accordance with federal standards.
While cannabis remains Schedule I, FDA has largely deferred to DOJ and DEA because the product cannot be lawfully marketed at all. Schedule III changes that dynamic: FDA would have clear authority to regulate — and, if it chooses, to prohibit — the sale of non-approved cannabis products, regardless of state legality. Any company handling cannabis without both DEA registration and FDA approval could be deemed in violation of federal law.
Whether that authority is used aggressively will depend entirely on enforcement priorities, which can shift with changes in administration or even in the FDA Commissioner’s chair — as illustrated when former Commissioner Scott Gottlieb declared CBD products unlawful under the FD&C Act. In a worst-case scenario, Schedule III could open the door for large multi-state operators and pharmaceutical companies to lobby for strict federal enforcement, using FDA oversight to sideline or eliminate smaller competitors unable to navigate the costly and time-consuming approval process.
Industry stakeholders and cannabis businesses should closely monitor White House announcements and DEA action in the coming months. While rescheduling does not legalize cannabis, it could substantially ease federal restrictions, expand research opportunities, expand business potential and, ultimately, increase the profitability of the multi-billion-dollar industry. However, stakeholders should understand that rescheduling is a statutorily mandated process. If the Trump administration indicates it is supportive of rescheduling, the process must comply with the all aspects of the Administrative Procedures Act.
Harris Beach Murtha is uniquely positioned to help clients reap the benefit that may come with rescheduling. As one of the first New York law firms to provide a comprehensive portfolio of legal services to the cannabis industry, we’ve carefully cultivated knowledge and connections by working with some of the nation’s leading multistate operators, start-ups, growers and non-plant-touching businesses. We assist with licensing, regulation, labor, real estate, zoning, baking, intellectual property, tax issues, corporate governance and structuring and mergers and acquisitions.
