BREAKING: Historic Federal Cannabis Policy Change
President Trump signed an executive order on December 18, 2025 to reschedule marijuana from Schedule I to Schedule III - the most significant federal cannabis policy shift in over 50 years.
Trump Signs Executive Order to Reschedule Marijuana: What New Jersey Customers Need to Know
On December 18, 2025, President Donald Trump signed an executive order directing federal agencies to reclassify marijuana from Schedule I to Schedule III. This marks the most consequential shift in U.S. cannabis policy in more than half a century. Here's what it means for you.
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The Bottom Line
What Changed
Marijuana moves from Schedule I to Schedule III
What Didn't Change
Recreational use NOT federally legalized
Business Impact
280E tax relief for dispensaries
For NJ Customers
No immediate changes to how you shop
What Happened on December 18, 2025
President Trump signed an executive order titled "Increasing Medical Marijuana and Cannabidiol Research" that directs Attorney General Pam Bondi to conclude the formal rescheduling process and publish a final rule moving marijuana from Schedule I to Schedule III of the Controlled Substances Act.
This comes after more than a year of regulatory review that began under the Biden administration. The executive order fast-tracks the conclusion of this process.
Key Points from the Executive Order:
- Moves marijuana from Schedule I to Schedule III
- Acknowledges 30,000+ healthcare practitioners in 43 states recommend medical marijuana
- Over 6 million registered medical cannabis patients nationwide
- Promotes research into medical applications
- Addresses federal hemp laws for CBD access
Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), also announced a new model to unlock Medicare funding for CBD treatments for seniors.
Schedule I vs. Schedule III: What's the Difference?
The Controlled Substances Act classifies drugs into five schedules based on their medical use, potential for abuse, and safety profile. This rescheduling is significant because it fundamentally changes how the federal government views marijuana.
Schedule I (OLD Classification)
"High potential for abuse, no currently accepted medical use"
Other Schedule I drugs:
- • Heroin
- • LSD
- • Ecstasy (MDMA)
- • Peyote
Marijuana was classified alongside heroin - despite 24 states legalizing recreational use and 43 allowing medical use.
Schedule III (NEW Classification)
"Moderate to low potential for physical and psychological dependence"
Other Schedule III drugs:
- • Tylenol with Codeine
- • Ketamine
- • Anabolic Steroids
- • Testosterone
This classification acknowledges marijuana has accepted medical use and lower abuse potential.
Why This Matters
For decades, marijuana's Schedule I status made it nearly impossible to conduct legitimate medical research and forced cannabis businesses to pay punitive federal taxes. This rescheduling removes those barriers while still maintaining federal oversight.
What This DOES Change
280E Tax Relief for Cannabis Businesses
The most immediate and significant impact is the elimination of IRS Code 280E restrictions. Under Schedule I classification, cannabis businesses couldn't deduct normal business expenses like rent, payroll, marketing, or equipment - only "cost of goods sold."
What this means: Dispensaries like The Library will be able to take federal tax deductions like any other business. This represents billions in potential savings for the $32 billion legal cannabis industry and could eventually lead to more competitive pricing for customers.
Expanded Medical Research
Schedule I status made it extremely difficult for researchers to study marijuana's medical applications. Scientists needed special DEA licenses and could only use government-grown cannabis.
What this means: Researchers can now more easily study cannabis for conditions like chronic pain, PTSD, epilepsy, and cancer-related symptoms. Expect more clinical trials and evidence-based medical applications in coming years.
CBD Medicare Coverage for Seniors
The executive order also addresses federal hemp laws to promote access to full-spectrum CBD that could be covered under federal health insurance plans.
What this means: Seniors on Medicare may eventually be able to access CBD products through their insurance, making these wellness products more affordable and accessible.
Improved Banking Access (Potentially)
While not directly addressed in the executive order, Schedule III classification may make banks more willing to work with cannabis businesses. Currently, many dispensaries operate cash-only due to federal banking restrictions.
What This DOESN'T Change
It's important to understand the limitations of this executive order. Despite being a historic shift, many aspects of cannabis law remain unchanged.
Recreational Use NOT Federally Legal
President Trump explicitly stated he is "not open to legalizing cannabis for recreational use," saying "It's never safe to use powerful controlled substances in a recreational manner." Recreational cannabis remains a controlled substance federally.
No Criminal Justice Changes
The executive order does not include any pardons, expungements, or criminal justice reforms related to marijuana offenses. Those with prior cannabis convictions are not automatically helped by this change.
State Laws Remain Primary
State cannabis laws are unchanged. In states where marijuana is illegal, it remains illegal. In New Jersey, you'll still follow all existing NJ cannabis purchasing rules - 21+ for recreational, licensed dispensaries only.
Employment & Federal Jobs
Federal employees and those with security clearances may still face restrictions. Employers can still drug test and make employment decisions based on cannabis use, regardless of state law.
Interstate Commerce Still Prohibited
You still cannot transport cannabis across state lines, even between two legal states. Each state's cannabis market remains isolated.
What This Means for New Jersey Customers
For cannabis consumers in the Garden State, the day-to-day experience won't change immediately. But there are real implications worth understanding.
Short-Term (Now)
- •No changes to how you purchase cannabis
- •Still need to be 21+ or have medical card
- •All NJ cannabis laws remain in effect
- •Products, pricing, and availability unchanged
Long-Term (Months/Years)
- •Potential price decreases as tax burden eases
- •More research-backed medical products
- •Possibly better banking = easier transactions
- •Stronger, more stable industry overall
The Bigger Picture
This rescheduling legitimizes the cannabis industry in ways that benefit everyone. A healthier industry means better products, more investment in quality and safety, and ultimately a better experience for consumers. While you won't notice changes tomorrow, the foundation is being laid for a more mature, stable cannabis market.
Political & Industry Reactions
Senate Minority Leader Chuck Schumer:
"A step in the right direction... more work must be done to decriminalize cannabis, ease overly restrictive banking regulations that stall industry progress."
Colorado Governor Jared Polis:
"Far past time for the federal government to catch up to Colorado and many other states and get rid of arcane federal policies on cannabis."
NORML (National Organization for Reform of Marijuana Laws):
"Rescheduling fails to harmonize federal marijuana policy with the cannabis laws of most states, particularly the 24 states that have legalized its use and sale to adults."
Opposition (20+ Republican Senators):
Led by Senator Ted Budd, a group argued marijuana "continues to be dangerous" and that rescheduling would "undermine your strong efforts to Make America Great Again."
Public Opinion
According to a November 2025 Gallup Poll, 64% of U.S. adults believe marijuana should be legal - a significant majority that has grown steadily over the past two decades.
Timeline: What Happens Next
December 18, 2025 - COMPLETE
Executive Order Signed
President Trump signs order directing rescheduling
Coming Weeks
Attorney General Action
AG Pam Bondi concludes formal rescheduling process
TBD
Final Rule Published
Official reclassification becomes law
2025 Tax Year
280E Relief Begins
Cannabis businesses may claim deductions starting with 2025 taxes
Ongoing
Industry Adaptation
Research expands, banking improves, market matures
Frequently Asked Questions
Is marijuana now legal federally?
No. Trump's executive order moves marijuana from Schedule I to Schedule III, but it does NOT federally legalize recreational marijuana. Cannabis remains a controlled substance. However, this rescheduling removes significant barriers for medical research and provides tax relief to licensed cannabis businesses.
What does Schedule III mean for marijuana?
Schedule III drugs are defined as having 'moderate to low potential for physical and psychological dependence.' Other Schedule III substances include Tylenol with codeine and ketamine. This classification acknowledges marijuana's accepted medical use and lower abuse potential compared to Schedule I drugs like heroin.
How does rescheduling affect New Jersey dispensaries?
The biggest immediate impact is 280E tax relief. Previously, cannabis businesses couldn't take federal tax deductions. Now, dispensaries like The Library can deduct normal business expenses, potentially leading to lower operating costs and eventually more competitive pricing.
Will cannabis prices go down?
Potentially, over time. The 280E tax relief improves the financial health of the legal cannabis industry. While this won't change prices overnight, savings could eventually be passed to customers through more competitive pricing.
Does this affect how I buy cannabis in New Jersey?
Not immediately. You'll still need to be 21+ or have a medical card, shop at licensed dispensaries, and follow all NJ cannabis laws. The purchase experience remains the same.
Is Trump going to legalize recreational marijuana?
No. President Trump explicitly stated he is 'not open to legalizing cannabis for recreational use,' saying 'It's never safe to use powerful controlled substances in a recreational manner.' This order focuses on medical access and research only.
When does the rescheduling take effect?
The executive order was signed December 18, 2025. Attorney General Bondi will finalize the process and publish a final rule. The 280E tax relief benefits may apply starting with the 2025 tax year.
What about CBD and Medicare?
Dr. Mehmet Oz announced a new Medicare funding model for CBD treatments for seniors. This could make CBD products more accessible for older Americans through federal health insurance coverage.
Visit The Library Today
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West Orange, NJ 07052
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Related Articles
Sources
- White House - Increasing Medical Marijuana and Cannabidiol Research Executive Order
- NBC News - Trump signs executive order fast-tracking reclassification of marijuana
- NORML - President Trump Takes Executive Action to Federally Reschedule Marijuana
- MJBizDaily - President Trump orders marijuana rescheduling, CBD coverage