Trump reclassifies pot to Schedule III

President Donald Trump signed an executive order on Thursday directing federal agencies to reclassify marijuana, loosening longstanding restrictions on the drug and marking the most significant shift in U.S. marijuana policy in more than half a century.

The order, finalized by the Drug Enforcement Administration, moves marijuana from its Schedule I classification, the most restrictive category under the Controlled Substances Act, along with heroin and LSD, to its Schedule III classification, which covers substances with accepted medical use and lower potential for abuse, such as ketamine and Tylenol with codeine.

Also on Thursday, Centers for Medicare and Medicaid ServicesAccording to senior White House officials, Dr. The Mehmet Oz-led company is expected to launch a pilot program in April that will allow certain seniors covered by Medicare to receive doctor-recommended CBD products for free, which must comply with all local and state laws regarding quality and safety. Products must also come from a legally compliant source and undergo third-party testing for CBD levels and contaminants.

The reclassification is seen by many analysts as a financial lifeline for the cannabis industry. The move exempts companies IRS Code Section 280EIt will allow them to deduct standard expenses such as rent and payroll for the first time. It also opens the door to banking access and institutional capital that were previously sidelined due to compliance fears.

Many on Wall Street also expect the Medicare pilot to attract big pharmaceutical players into the industry to generate federally insured revenue.

While CBD has grown in popularity in recent years with consumer products ranging from seltzers to skin care, the FDA has stopped short of giving the compound its full support.

Studies FDA-funded studies find ‘inconsistent benefits’ for targeted conditions long-term CBD use It can cause liver toxicity and interact with other life-saving medications.

Currently the FDA only approved CBD-based Epidiolex for rare forms of epilepsy.

Experts and industry insiders told CNBC this week that the reclassification could pave the way for more research on the effects of CBD use.