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Cannabis Rescheduling
December 2025 | IVPMED
Schedule III Rescheduling and Cannabinoid Research: What the December 2025 Executive Order Changes for the Regulated Market
On December 18, 2025, the White House issued an Executive Order titled “Increasing Medical Marijuana and Cannabidiol Research.” The order’s significance for industry is practical: it directs federal agencies to accelerate the administrative path toward Schedule III rescheduling, and it elevates research methods, product definitions, and guardrails for cannabinoid products, especially in areas where the market has operated with inconsistent standards.
What the Executive Order Actually Directs
The order is structured around three operational priorities:
First, it instructs the Attorney General to take “all necessary steps” to complete the rulemaking process to reschedule marijuana to Schedule III as expeditiously as possible, consistent with federal law.
Second, it directs senior White House staff to work with Congress to update the statutory definition of certain hemp-derived cannabinoid products, with the stated intent of preserving access to “appropriate full-spectrum CBD products” while restricting products that pose serious health risks.
Third, it calls for the development of research methods and models (explicitly including real-world evidence) to assess health outcomes and inform standards of care. It also references a focus on long-term health effects in populations such as adolescents and young adults.
Where the Rescheduling Process Stands
This Executive Order does not itself reschedule cannabis. It instructs the federal government to complete a process that is already underway.
The Executive Order states that:​​
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Marijuana is currently listed under Schedule I of the Controlled Substances Act.
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In 2023, HHS recommended that marijuana be controlled under Schedule III.
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In May 2024, DOJ issued a proposed rule to reschedule marijuana to Schedule III, which received nearly 43,000 public comments and is awaiting an administrative law hearing.
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That is why the most accurate framing for businesses is: the order is a directive to expedite rulemaking, not a final outcome.
Why Schedule III is a Meaningful Business Threshold
Rescheduling matters because federal scheduling influences how research is conducted, how medical use is treated in federal definitions, and how a regulated market can mature around reproducible standards.
Under the Controlled Substances Act, Schedule III is associated with a lower abuse potential than Schedules I and II and a “currently accepted medical use” in treatment in the United States (among other criteria).
The Executive Order ties rescheduling to a specific industry bottleneck: constrained research, limited evidence of development on safety and efficacy, and the lack of adequate clinical guidance.
From an industry lens, the commercial implication is not “public perception.” It is whether regulated operators, researchers, and medical stakeholders can work within a framework that supports:
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Credible, scalable research;
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Clearer standards for product composition and labeling; and
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More mature medical utilization practices.
The 280E Question: Why Operators are Focused on Economics, not Headlines?
One of the most discussed downstream issues around Schedule III is Internal Revenue Code Section 280E.
The statutory text of 26 U.S.C. § 280E disallows deductions or credits for businesses trafficking controlled substances “within the meaning of schedule I and II” of the CSA, when prohibited by federal law or relevant state law.
Because 280E is explicitly tied to Schedules I and II, many market participants view Schedule III rescheduling as potentially removing the schedule-based trigger that has been applied to state-legal cannabis businesses. Industry leaders quoted in Cannabis Business Times repeatedly point to this as a material operating economics issue (describing potential impacts on profitability and free cash flow) while still framing it as dependent on rescheduling being completed.
A disciplined way to state this for an IVPMED audience is: operators are watching Schedule III because it could change the tax treatment that has constrained reinvestment capacity, and because research restrictions and compliance complexity have limited medical-scale normalization.
The Hemp-derived Cannabinoid Track: Definitions, Guardrails, and Consistency
A notable portion of the Executive Order addresses the market reality that hemp-derived cannabinoid products (especially CBD products) have grown rapidly amid inconsistent standards.
The order directs work toward a regulatory framework that could include guidance on:
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An upper limit on milligrams of THC per serving,
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Per-container considerations, and
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CBD:THC ratio requirements.
It also instructs HHS, FDA, CMS, NIH to develop research methods using real-world evidence to improve access to hemp-derived cannabinoid products and to inform standards of care.
From a business standpoint, this matters because markets scale responsibly when they converge around:
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Consistent definitions of what a product is,
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Labeling integrity, and
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Evidence that supports predictable outcomes and risk management.
Why This Matters for IVPMED
IVPMED operates in a segment where long-term value is created by discipline: evidence, reproducibility, safety posture, and measurable outcomes.
This Executive Order explicitly elevates:
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Accelerated progress toward Schedule III via rulemaking;
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Real-world evidence, research models, and standards-of-care inputs;
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Clearer guardrails and definitions around hemp-derived cannabinoid products.
Those priorities align with where the regulated medical cannabinoid market tends to move as it matures: less ambiguity, higher expectations for consistency, and more demand for systems that can support compliant, auditable programs.
Source Note
White House Executive Order, Increasing Medical Marijuana and Cannabidiol Research (Dec. 18, 2025). INCREASING MEDICAL MARIJUANA AND CANNABIDIOL RESEARCH
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