In a move that has stunned the hemp sector, President Trump issued an executive order last week aimed at speeding the rescheduling of marijuana and expanding Medicare coverage for CBD. The decision arrives as a federal funding bill threatens to close a loophole that has allowed hemp-derived products to thrive with minimal regulation.
A Looming Federal Ban
Since November, the hemp industry has faced uncertainty after a provision in the government funding bill was passed to close a loophole that permitted hemp-derived products to flourish with barely any regulation. Industry leaders warned that the provision could ban nearly all hemp-derived consumer products, such as full-spectrum CBD, and put companies out of business when it takes effect next year.
The language in the spending bill stipulates that any hemp-derived product containing more than 0.4 milligrams of THC will be considered cannabis rather than hemp, thereby subjecting it to stricter controls. The bill also provides a one-year period before the ban takes effect, giving companies a limited window to adjust.
Trump’s Order and Its Intent
The executive order alludes to the spending bill provision and calls for administration officials to work with Congress to update the law to keep certain hemp-derived CBD products available “while preserving the Congress’s intent to restrict the sale of products that pose serious health risks.”
Hemp-derived CBD is a legal substance extracted from the cannabis plant. Full-spectrum CBD contains trace amounts of naturally occurring THC and is non-intoxicating. Under the current federal framework, hemp is not a scheduled product, but the new spending bill would reclassify any product exceeding the THC threshold as cannabis.
Industry Reaction
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, called 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.
He added, “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.”
Thomas Winstanley, executive vice president and general manager at edibles.com, said companies will lobby to extend the implementation period for at least six months ahead of the Jan. 30 government funding deadline. He noted 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.
Winstanley emphasized the need for a concurrent regulatory path for cannabis and hemp, stating, “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.”
White House Fact Sheet
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.” The same fact sheet noted that 1 in 5 American adults and nearly 15 percent of seniors have reported using CBD in the past year.
The fact sheet also warned 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.”
The Rescheduling Order
The executive order is far from law. It directs the attorney general to “expedite completion of the process” of rescheduling marijuana from Schedule I to Schedule III. Schedule I drugs, such as 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 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.
Lindsey noted that 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.'”
Legislative and Research Needs
The fact sheet concluded that to improve access and inform standards of care, “what is needed are ‘legislative solutions and innovative research methods.'” Lindsey expressed concern that the definitional change, as it is right now, is so broad it could prevent CBD products from making it to the marketplace. “Trump is saying, go back. Make sure those folks are included,” he added.
Key Takeaways
- Trump’s order aims to speed marijuana rescheduling and expand Medicare CBD coverage, giving hemp producers a lifeline.
- A federal funding bill threatens to ban hemp-derived products, especially full-spectrum CBD, by reclassifying them as cannabis if they exceed 0.4 mg THC.
- Industry leaders, including Jonathan Miller and Thomas Winstanley, see the order as a political boost but emphasize that it does not change the legal framework.
The executive order signals a shift in federal policy toward hemp and CBD, but the ultimate outcome will depend on congressional action and the continued lobbying efforts of the hemp industry.
Closing
As the hemp industry braces for potential regulatory changes, the executive order offers a temporary reprieve and a clear message that the administration is willing to engage with lawmakers. The next 11 months will be critical for determining whether the industry can secure favorable legislation and maintain access to hemp-derived products for consumers across the country.
