In a significant move for the hemp industry, President Trump has issued an order to expedite the rescheduling of marijuana and initiate Medicare coverage for CBD. This decision could provide a crucial boost to the industry, which faces a major lobbying challenge in the coming year.

The hemp sector has been struggling since November, when a government funding bill introduced a provision that effectively tightened regulations on hemp-derived products. This loophole had previously allowed these products to thrive with minimal oversight.

Industry leaders have raised concerns that this provision might lead to a ban on nearly all hemp-derived consumer products, including full-spectrum CBD, potentially driving many companies out of business once it becomes effective next year.

President Trump’s directive, announced last week, represents a pivotal development in U.S. drug policy. It follows an intense lobbying effort by the cannabis industry, with support from some of Trump’s long-standing friends and allies.

The order references the spending bill provision and urges administration officials to collaborate with Congress to update the law. The aim is to ensure that certain hemp-derived CBD products remain available, while also maintaining Congress’s intent to restrict the sale of items that could pose serious health risks.

Hemp-derived CBD is a legal substance derived from the cannabis plant. Full spectrum CBD contains trace amounts of naturally occurring THC and is non-intoxicating.      

Hemp is not a scheduled product. But under the language in the spending bill, any hemp-derived product containing more than 0.4 milligrams of THC will be considered cannabis rather than hemp. 

Hemp industry stakeholders acknowledged the executive order could bolster their case to Congress but doesn’t change anything legally.  

Jonathan Miller, general counsel for the U.S. Hemp Roundtable, said he considers the order a “direct rebuke” to the language in the spending bill.  

“In terms of where the political discussion is going to go, it is definitely a lifeline, and definitely gives us a whole lot more leverage to ensure that what Congress does in the next 11 months is going to be favorable for the industry,” Miller said. 

“We are very hopeful that now the president has spoken, that particularly Republicans in Congress will take heed, will go with the hemp industry and support getting rid of the ban,” Miller said.  

Hemp was legalized in the 2018 farm bill, with the intent that it could be used in agriculture and textiles. But the law’s broad definition and subsequent lack of federal regulation created a loophole that allowed companies to extract high levels of THC — the psychoactive compound responsible for a high.   

Critics allege companies are exploiting that loophole to chemically alter the THC in hemp or use it in large quantities that make it just as intoxicating as higher-potency marijuana, without it being considered marijuana.   

The language in the funding bill gives a one-year period before the ban takes effect.  

Thomas Winstanley, executive vice president and general manager at edibles.com, said companies will be lobbying to extend the implementation period for at least six months ahead of the Jan. 30 government funding deadline, in hopes of having included in any funding bill.

Winstanley said it was refreshing to hear a president, particularly a Republican, acknowledge that cannabis and CBD could have health benefits and are not inherently dangerous substances.  

“I think what is being signaled is that there are these two categories, cannabis and hemp, are very intrinsically related to one another … they need to have some concurrent path to regulation,” Winstanley said. 

In a fact sheet, the White House said hemp-derived cannabinoid products “have potential to improve patient symptoms for common ailments and are frequently used by Americans.” 

Winstanley and others in the industry said they felt whiplash, as the White House seemed to contradict the hemp ban Congress wrote into the funding bill.  

“What this does, I think more broadly, is it creates a more earnest conversation with Congress, knowing that the executive branch is now signaling that cannabinoid-based products may have health efficacy,” Winstanley said.  

Still, the executive order is far from law. It merely directs the attorney general to “expedite completion of the process” of rescheduling marijuana from Schedule I to Schedule III. 

Schedule I drugs, which include cocaine and LSD, are considered to have no medical benefit and often carry the most severe criminal penalties. Schedule III, by contrast, contains numerous drugs that are commonly used in mainstream medicine, including prescription opioids and anxiety medications. 

Other industry stakeholders cautioned that the rescheduling order will not help the makers of products containing synthetic THC being marketed as hemp, which the spending bill aims to remove from the market.  

“What happens pretty consistently is you’ll have the intoxicants crowd riding the coattails of CBD … and claiming that you’re sort of CBD forward, when really there’s an intoxicating level of THC going on at the same time,” said Chris Lindsey, vice president for state policy and advocacy at the American Trade Association for Cannabis and Hemp.  

The White House signed and endorsed the new policy in the spending bill. So despite what some see as an apparent contradiction, Lindsey said Trump was endorsing a narrow legislative fix for true CBD companies, “not just some of the companies out there that are basically operating as if they’re marijuana companies.”

The fact sheet says that 1 in 5 American adults and nearly 15 percent of seniors have reported using CBD in the past year, but that the recent hemp ban, “including recent changes that affect full-spectrum CBD products, leaves American patients and doctors without adequate guidance or product safeguards.”

To improve access and inform standards of care, what is needed are “legislative solutions and innovative research methods.” 

“There has been some concern that the definitional change, as it is right now, is so broad that it could prevent CBD products from making it to the marketplace,” Lindsey said. “Trump is saying, go back. Make sure those folks are included.”