Washington is simultaneously legalizing and banning cannabis. Someone should probably tell Washington.
By Eben Sumner, Founder and CEO, Casco Bay Hemp
Editor’s note: The regulatory landscape described in this article reflects the status of federal law and pending legislation as of April 27, 2026. This is a fast-moving situation. Readers should verify current bill status before making business decisions.
On April 23, 2026, the United States federal government did two things that do not belong in the same sentence.
The Department of Justice, acting under a December 2025 executive order from President Donald Trump, issued a final order rescheduling FDA-approved marijuana products and state-licensed medical marijuana from Schedule I to Schedule III of the Controlled Substances Act. It was the most significant shift in federal drug policy in more than 50 years. Hours later, on the same day, the same president posted to Truth Social urging Congress to act quickly to preserve Americans’ access to full-spectrum CBD products.
“I am calling on Congress to update the Law to ensure that Americans can continue to access the full-spectrum CBD products they have come to rely on,” Trump wrote. “We must get this done RIGHT and FAST.”
I read that post from my facility in Biddeford, Maine, where we manufacture hemp-derived CBD products and export them to regulated markets on three continents. And I had one immediate thought: the president just called on Congress to fix a law he signed five months ago, while his party holds a supermajority in the same Congress he is asking to act, and while not a single one of the multiple legislative remedies already introduced has received so much as an invitation to the House floor.
That is not political commentary. That is the documented timeline of the current moment in U.S. cannabis policy, and it is the subject of this article.
We are operating inside a federal regulatory framework that is pulling the cannabis plant in two directions at once. One set of federal actions is moving to legitimize intoxicating marijuana under Schedule III, opening pathways for medical research, physician access and, eventually, fairer tax treatment for state-licensed operators. Another set of federal law, already signed and already on the clock, is on track to criminalize the vast majority of non-intoxicating hemp products, eliminate the supply chain that produces them and make it federally illegal to process hemp flower into crude oil. Those two trajectories are not the product of opposing parties. They are the product of one administration, one Congress and one extraordinary failure of legislative coherence.
The Rescheduling: Historic, Bounded and Not What You Think
The April 23 order is real, it matters and it has been overstated in almost every headline I have seen.
Acting Attorney General Todd Blanche signed an order placing two specific categories of marijuana into Schedule III of the Controlled Substances Act. The first category is drug products containing marijuana that have been approved by the Food and Drug Administration. In practice, this currently means a short list: Epidiolex, the CBD-based medication approved for treatment-resistant epilepsy, and Marinol and Syndros, which contain synthetic delta-9 THC and are prescribed for chemotherapy-related nausea and AIDS-related appetite loss. That is the full universe of FDA-approved marijuana products. The second category is marijuana that is subject to a qualifying state-issued license authorizing manufacture, distribution or dispensing for medical purposes only. A licensed medical dispensary in Maine, Colorado or any other state operating under a medical-only program qualifies. An adult-use recreational retailer operating legally under state law, but without a medical-specific license, does not. Recreational marijuana in every state, regardless of how well-regulated, remains Schedule I under this order.
That is it. The order covers naturally derived delta-9 THC and marijuana extracts, but only to the extent those substances are incorporated into an FDA-approved product or covered by a qualifying state medical license. Simultaneously, the DEA announced an expedited administrative hearing beginning June 29, 2026, to evaluate broader rescheduling of all marijuana. That hearing has a mandated conclusion date of July 15, 2026. What comes out of it, and when any resulting rule takes effect, remains an open question.
I want to be precise about what this rescheduling does and does not change, because the confusion in the market is real and it is costly.
What it changes: State-licensed medical marijuana entities can now register with the DEA using their existing state credentials, with the agency committed to processing early applications within six months. Entities that submit applications by June 22, 2026, may continue operating under state licenses while under review. This is meaningful for medical operators who have been navigating a patchwork of state legitimacy and federal illegality for more than a decade.
What it does not change: Section 280E of the Internal Revenue Code, which prohibits ordinary business deductions for companies trafficking in Schedule I or Schedule II substances, is not directly resolved by this order. The IRS has indicated guidance is forthcoming, but as of this writing, no transitional rules have been issued. State and local taxes are similarly unaffected. The order explicitly states that any form of marijuana other than in an FDA-approved product or under a state medical license remains Schedule I, and those handling such material remain subject to full federal criminal and civil sanctions.
What it does not touch at all: hemp. Not one word of the April 23 order addresses hemp, hemp-derived cannabinoids, CBD or the November 2026 deadline that is bearing down on my industry.
Section 781: The Law Nobody Debated
On Nov. 12, 2025, President Trump signed H.R. 5371, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026. The bill ended a 42-day government shutdown, the longest in U.S. history, and it ran well over a thousand pages. Buried in Division B, Section 781, was a single provision that rewrote the federal definition of hemp and set a one-year clock on the majority of hemp-derived cannabinoid products currently sold in the United States.
The provision was not publicly debated. It was not subject to committee markup. It passed because it was attached to legislation the government needed to stay open.
On Nov. 12, 2026, one year from enactment, the provision takes effect.
Section 781 makes three principal changes to federal hemp law.
First, it replaces the prior delta-9 THC threshold with a total THC standard. Hemp is now defined as cannabis with a total THC concentration, including THCA and delta-8 THC, of not more than 0.3% on a dry weight basis. The 2018 Farm Bill only measured delta-9 THC. This single change eliminates THCA flower from the legal hemp market, because THCA converts to delta-9 THC upon heating and any honest total THC test on high-THCA flower will exceed the new threshold.
Second, it imposes a ceiling of 0.4 milligrams of total THC per container for finished hemp-derived consumable products intended for ingestion, inhalation or topical use. Not per serving. Per container.
Third, it excludes synthetic and converted cannabinoids from the hemp definition entirely.
Where the Supply Chain Actually Breaks
I am going to explain this from the inside.
When you extract cannabinoids from hemp flower, you produce crude oil. That crude concentrates all cannabinoids, including THC.
A hemp flower at 0.3% THC becomes crude at roughly 2% to 3% THC.
Under Section 781, that crude becomes a controlled substance the moment it is created.
There is no chemistry that avoids this.
What This Means
If Section 781 takes effect without amendment, the hemp-derived cannabinoid industry becomes federally unlawful.
Not at the shelf.
At the first step of production.
The Contradiction in Plain Terms
- Expanding access to marijuana
- Encouraging CBD use in healthcare
- While simultaneously eliminating the legal framework that allows CBD to exist
Final Thought
The plant is still the same plant.
Washington is the variable.
