The executive order signed by U.S. President Donald Trump directing federal agencies to reschedule cannabis is expected to benefit hemp-derived CBD medicine, while doing little to legitimize the vast over-the-counter CBD market that has operated for years without approval of the U.S. Food & Drug Administration (FDA) .
The order, signed Dec. 18, lowers federal barriers to research and prescribing, and signals potential Medicare reimbursement for physician-recommended CBD therapies. But it does not resolve the FDA’s long-standing objections to how CBD health aids – sold in the form of oils, gummies, and supplements – are currently marketed and sold in U.S. retail outlets.
Trump’s order does not resolve CBD’s regulatory contradictions, but rather sharpens the divide between hemp CBD as medicine and hemp CBD as consumer product – a distinction likely to shape investment decisions across the sector in 2026 and beyond.
CBD OTC and Rx
The order will have a direct impact on Epidiolex. Epidiolex by UK-based GW Pharmaceuticals (a division of Jazz Pharmaceuticals Dublin) remains the FDA-approved CBD drug, having been cleared in randomized clinical studies and being manufactured to pharmaceutical standards.
A high-CBD, no-THC formula, Epidiolex has FDA’s stamp of approval as a treatment specifically for seizures associated with Lennox-Gastaut Syndrome, Dravet Syndrome and Tuberous Sclerosis Complex. The European Medicines Agency as well as the UK Healthcare Products Regulatory Agency have also given it their approval. The drug’s alternative name in Europe and UK is “Epidyolex.” Canada’s federal health regulator, Health Canada, has also approved the medicine.
FDA Position
On the U.S. Market today, non-prescription CBD is the most popular product. This market has been dominated since the Farm Bill 2018, which allows the sale of CBD without FDA approval. FDA officials have repeatedly stated these products can’t be sold as dietary supplement or food ingredient, citing safety concerns, inconsistent labeling and data on long-term risks.
The agency has asked Congress for a new legal framework in 2023, and also made subsequent statements. It concluded that the current laws on food supplements and foods cannot provide a nationwide market with CBD. Until that happens, FDA enforcement discretion — not regulatory certainty — continues to govern most retail CBD.
The Hemp Signal
This order is a confirmation of a strategy shift already in place in the hemp sector: CBD could have greater value in the pharmaceutical industry than it does in supplements. Hemp-derived CBD is still legal, and separate from marijuana. But commercial success appears to depend more on alignment with FDA drug pathways instead of consumer wellness channels.
That shift favors companies investing in clinical trials, intellectual property, and regulated manufacturing — and could accelerate consolidation as capital migrates away from fragmented retail CBD brands.
Effect on marijuana
In addition to hemp and CBD the executive order instructs federal agencies that they must complete the long anticipated rescheduling marijuana from Schedule I (the current classification) to Schedule III. This will recognize the accepted medical use of the drug and reduce federal barriers for research, prescribing, and certain financial transactions. It is anticipated that the shift in policy will reduce restrictions for clinical trials and lower compliance requirements for medical cannabis operators operating under state law, as well as remove tax penalties tied to Schedule I. However, it does not include federal legalization.
Under federal law, recreational marijuana is still illegal. The regulatory power over the commercial cannabis market continues to be primarily in states’ hands.