As the excitement around President Donald Trump’s executive order to push forward with cannabis rescheduling has faded, the bill is now facing a much harsher reality.
Just three weeks after Trump signed an executive order directing federal agencies to reclassify cannabis from Schedule I to Schedule III, major opposition from within Trump’s usually loyal Republican party has emerged, while state action and refusal from institutional players also serve to dampen the palpable feeling of optimism felt over the Christmas break.
A coalition of 48 Republican lawmakers, including House Speaker Mike Johnson and all four Senate Republican leaders, openly defied Trump’s decision in letters urging him not to proceed. Elsewhere, state-level campaigns in Maine, Massachusetts, and Arizona are pushing ballot initiatives to repeal existing legalisation laws.
Meanwhile, a Congressional Research Service report published on January 2 reveals that even if rescheduling proceeds, most criminal penalties and collateral consequences affecting employment, gun ownership, federal benefits, and immigration status would remain intact
Republican revolt and state-level backlash
Trump’s cannabis move has triggered rare open defiance from his own party. According to Politico, 22 Senate Republicans, including all four members of Senate Republican leadership, sent a letter urging Trump not to proceed on the eve of his announcement.
House Speaker Mike Johnson lobbied the president directly to hold off, the Washington Post reported, and 26 House Republicans sent a similar letter led by Texas Rep. Pete Sessions and Freedom Caucus Chair Andy Harris.
“Reclassifying marijuana as a Schedule III drug will send the wrong message to America’s children, enable drug cartels, and make our roads more dangerous,” the House Republicans wrote in what Politico described as ‘a rare rebuke of the president from his right flank.’
The Senate leadership letter, signed by Majority Whip John Barrasso, Conference Chair Tom Cotton, Conference Vice Chair James Lankford, and Policy Committee Chair Shelley Moore Capito, argued that ‘facilitating the growth of the marijuana industry is at odds with growing our economy and encouraging healthy lifestyles for Americans.’
Despite this opposition, the House on January 8 passed a spending bill (397-28) that removed a critical obstacle to rescheduling. The bill stripped Section 607, a provision Republicans had advanced in July 2024 that would have explicitly prohibited the Justice Department from using federal funds to act on rescheduling, while preserving longstanding Rohrabacher-Farr Amendment protections for state medical cannabis programs.
Section 607, advanced by Republicans in July 2024, would have explicitly prohibited the Justice Department from using federal funds to act on rescheduling. The bill removed this funding block while preserving longstanding Rohrabacher-Farr Amendment protections for state medical marijuana programs from federal interference.
However, the bill maintained problematic enforcement language that allows the DOJ to pursue enhanced penalties in drug-free zones within 1,000 feet of schools and other protected areas, provisions that cannabis policy analysts warn could effectively gut medical cannabis protections in most populated areas. The bill also inexplicably excluded Nebraska, Idaho, Kansas, and American Samoa from the list of protected jurisdictions.
At the state level, opposition has taken a different form. On January 8, Nebraska Attorney General Mike Hilgers led a coalition of eight Republican state attorneys general in issuing a statement opposing rescheduling, arguing that cannabis is already ‘properly classified’ as a Schedule I drug.
Meanwhile, Marijuana Moment reported on January 12 that campaigns in Maine, Massachusetts, and Arizona are pushing ballot initiatives to repeal existing cannabis legalisation laws.
In Maine, Republican lawmaker David Boyer and industry advocates have accused petitioners of using deceptive tactics, with one out-of-state signature gatherer caught on video misrepresenting the initiative as being about product safety when it would actually end regulated recreational sales and eliminate home cultivation rights.
CRS report reveals the limited scope of rescheduling benefits
A Congressional Research Service report published on January 2 provides the most comprehensive assessment yet of what would change if cannabis moves to Schedule III, revealing that most criminal penalties and collateral consequences would remain intact.
The report clarifies that while rescheduling would eliminate specific penalties tied to Schedule I classification, ‘most of the consequences for marijuana use or for marijuana-related convictions would remain the same if it is moved to Schedule III.’
On the criminal penalty front, the CSA’s core cannabis trafficking penalties are written specifically for the substance rather than tied to its schedule classification, meaning they would remain unchanged. A first offence for trafficking 1,000 kg or more of marijuana would still carry a minimum 10-year sentence, while trafficking 100-999 kg would still carry a minimum five-year term.
However, some Schedule I-specific provisions would be eliminated. Current federal law makes it unlawful to ‘place in any newspaper, magazine, handbill, or other publications, any written advertisement [that] has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance’, with violations carrying up to four years in prison.
These advertising penalties would no longer apply under Schedule III, potentially having major economic benefits for the industry in both increased sales and in the creation of specialised cannabis advertising companies.
The widely discussed tax benefit is also confirmed. 280E, which prohibits businesses from deducting costs of ‘trafficking in controlled substances (within the meaning of Schedule I and II),’ would become ‘inapplicable to marijuana businesses’ under Schedule III, allowing them to deduct operational expenses like payroll, rent, and advertising.
Despite these benefits for business, the report emphasises that ineligibility for federal employment and military service, inability to purchase and possess firearms, loss of federal housing opportunities and social assistance programs, ineligibility for federal grants, contracts, loans and professional licenses, immigration-related penalties, and restrictions on postsecondary students and campus employees all remain in place.
The report also highlights a sharp decline in federal marijuana prosecutions. In FY2024, only 471 individuals were sentenced for marijuana trafficking in federal court, down 58% from 1,118 in FY2020 and down 87% from 3,543 in FY2015.
Of those sentenced in FY2024, 76% received less than five years in prison, suggesting federal enforcement has already shifted significantly even before any formal rescheduling.
Procedural uncertainty remains despite Trump’s directive. The Drug Enforcement Administration (DEA) said on January 6 that the cannabis rescheduling appeal process ‘remains pending’ despite the executive order, and the Justice Department could potentially restart the process entirely, though such scenarios seem politically unlikely given Trump’s public commitment.
For now, the industry finds itself celebrating tax relief and advertising freedoms while Republican lawmakers, financial institutions, and state-level opponents resist the broader shift Trump has endorsed.
