Cannabis Rescheduling vs Descheduling Explained

On December 18, 2025, an Executive Order called “Increasing Medical Marijuana and Cannabidiol Research” was signed. This Order directs the Department of Justice (DOJ) and Drug Enforcement Administration (DEA) to take the necessary steps to reschedule cannabis from a Schedule I to a Schedule III drug under the Controlled Substances Act, a process that began under the previous administration. While this does appear to be a major step toward changing federal cannabis policy, it is not an immediate, unilateral reclassification. The Executive Order directs the DEA and DOJ to complete the administrative rulemaking process, meaning there will still be notice-and-comment, agency review, and the potential for legal challenges before any final rule takes effect. In other words, this is the beginning of a transition, not the end of the story.

Many would agree that this impending policy change seems like a step in the right direction, and in some respects, it definitely is. Rescheduling cannabis from a Schedule I substance to a Schedule III would be a formal acknowledgment of cannabis’s medical use, something patients, advocates, and many clinicians have been saying for decades. It would provide 280E tax relief for plant-touching operators by allowing them to deduct ordinary business expenses, which has the potential to dramatically improve margins for compliant, licensed businesses. It would also make it easier to secure funding for cannabis research by reducing some of the regulatory barriers that currently restrict clinical trials, product access, and the ability to study real-world products. Researchers would face fewer hurdles in obtaining study material, and institutions that have been wary of cannabis research under Schedule I might finally be willing to engage. 

We should celebrate progress, but we also need to keep in mind that rescheduling cannabis is not full decriminalization, and it does not automatically change how federal law treats adult-use markets. Even at Schedule III, cannabis would remain a federally controlled substance, and activities outside authorized medical or research channels could still carry criminal penalties. Rescheduling preserves federal-state incoherence and keeps cannabis in a pharmaceutical/FDA box, which could enable larger, existing industries and large MSOs to take over the industry and squeeze out smaller operators, especially if federal standards and compliance costs are calibrated to favor well-capitalized firms.

To understand the scope of this change, it helps to look at the legal architecture. The Controlled Substances Act of 1970 regulates the manufacture, possession, and distribution of certain substances, assigning them to one of five schedules based on medical use and potential for abuse. Schedule I substances, like heroin and LSD, have “no accepted medical use,” while Schedule III drugs– such as ketamine, testosterone, and certain steroids—may be prescribed under federal law. Moving cannabis from I to III would shift it from “prohibited substance” to “regulated medicine,” even though it would still fall under DEA oversight. Importantly, this shift occurs through the executive branch via administrative rulemaking—the President cannot deschedule a drug by Executive Order alone. Full descheduling would require legislative action by Congress to amend or repeal portions of the CSA itself. 

This modern scheduling system also obscures how long cannabis has been woven into American economic and medical life. Historically, cannabis played a central role in American industry and medicine long before criminalization. Hemp was a required crop in the colonies, supporting rope, sailcloth, and textiles for over two centuries. Medicinal cannabis appeared in the U.S. Pharmacopeia from 1850 until 1941, used for pain, seizures, and sleep issues, until it was effectively outlawed by the Marijuana Tax Act of 1937. That policy marked a shift from evidence-based medicine to tax and criminal frameworks that gradually erased cannabis from legitimate health use.

Fast forward to today, and we have a growing body of evidence for both benefits and risks. Patients use cannabis for chronic pain, nausea, seizures, and more, often after exhausting other options. At the same time, clinicians and public-health experts raise concerns about problematic use, high-potency products, youth-access, and links between heavy use and mental health issues. Rescheduling is often framed as a way to reconcile these realities: it acknowledges medical value and facilitates better research, but it also keeps cannabis within a controlled, medicalized framework that is more comfortable for risk-averse policy makers. The question is whether that framework can ever fully address the harms of criminalization and the economic inequities baked into the current market.

This is where The Parabola Center for Law and Policy centers its critique. The Center, a nonprofit legal think tank focused on equitable reform, argues that rescheduling stops short of true legalization. It does not end criminal penalties for possession or meaningfully address equity, access to banking, or community reinvestment. Parabola warns that without comprehensive legislative reform, rescheduling could entrench corporate consolidation — favoring pharmaceutical and tobacco interests already positioned to benefit from compliance-heavy models. They advocate for descheduling instead: removing cannabis entirely from the CSA to allow Congress and agencies to design a new framework emphasizing public health, small business inclusion, and social equity.

Descheduling doesn’t mean cannabis would be able to be grown and distributed without government intervention. It simply means it would no longer be a crime under the CSA in the eyes of the federal government, opening the door for Congress and federal agencies to regulate cannabis more like alcohol or tobacco through licensing, age restrictions, marketing rules, product standards, impaired-driving laws, and taxation. Descheduling could also more directly support goals like automatic expungement, reduced incarceration, and community reinvestment, because it acknowledges that cannabis itself should not be treated as an inherently illicit substance. It could allow for interstate commerce in cannabis products, create clearer pathways for banking and insurance, and give states a more stable federal backdrop for the programs they have already built. However, it also raises concerns about corporate dominance and commercialization, underscoring the importance of pairing descheduling with deliberate policy design that prioritizes equity and community input.

Is rescheduling a way to patch a broken system, or a way to avoid the harder conversation about descheduling and building a new framework from scratch? In reality, it may end up being both: a meaningful step that eases some of the worst contradictions of federal law, and a potential off-ramp if we allow it to stand in for deeper reform. The challenge for policymakers, advocates, and industry stakeholders is to treat rescheduling as a floor, not a ceiling, and to keep pushing toward a future in which cannabis policy aligns with public health, scientific evidence, and genuine justice.