Cannabis policy at the federal level in the United States is evolving with the announcement this week that the Centers for Medicare and Medicaid Services (CMS) will now allow organizations participating in certain Innovation Center models to begin offering various cannabinoid products.

“Through this optional incentive, eligible hemp-derived products can be incorporated into patient care plans under clinician guidance, consistent with model requirements and applicable law.” CMS wrote in a press release announcing the launch.

“Under the Substance Access BEI, participating organizations that elect and receive CMS approval may furnish eligible hemp-derived products for up to $500 per year per eligible beneficiary, subject to model requirements and safeguards, as well as clinical determination.” the press release also stated.

“Federally legal hemp-derived products eligible in the model contain no more than 0.3% delta-9 THC and exclude the following: inhalable products, any products containing more than 3 mg per serving of tetrohydrocannabinols in an orally administered form, and any products containing cannabinoids not naturally produced or capable of being produced by or in the cannabis plant during its cultivation.” stated CMS.

The program’s launch represents the first of what is expected to be a series of implementations of an executive order issued by United States President Donald Trump back in December. Part of the executive order called for making cannabidiol (CBD) products available to Medicare patients, which has now occurred, although the launch is facing a legal challenge from cannabis opponents.

“The Medicare cannabis product plan is being challenged in a lawsuit filed this week by a coalition of anti-marijuana organizations. A federal judge denied their motion for a temporary restraining order to halt it from launching, but scheduled a hearing for April 20 on their separate request for a preliminary injunction.” wrote Marijuana Moment in its original coverage.

President Trump’s executive order called for expediting the process of moving cannabis from its current status of Schedule I to Schedule III. While the rescheduling of cannabis at the federal level does not legalize it nationwide, it will have a wide-ranging impact on the emerging cannabis industry in the United States and beyond.

The most immediate impact of cannabis being rescheduled from Schedule I to Schedule III pertains to how many state-level cannabis companies are taxed due to 280E. Section 280E of the Internal Revenue Code prohibits businesses from deducting certain business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the Controlled Substances Act.

Moving cannabis to Schedule III will result in state-legal cannabis businesses in the U.S. saving billions of dollars annually. Those cannabis industry tax savings can obviously be used for any number of things, including helping companies expand their operations domestically and internationally.

“The president has promised to reschedule cannabis. And movement is underway at the DOJ to do it, possibly as soon as within 30 to 60 days, one observer said.” reported MJBizDaily this week.

Trump “has been clear in his directive to have cannabis rescheduling implemented expeditiously, and it is understood that the administration is taking the necessary steps to ensure the process is legally and procedurally sound,” Brian Vicente, a partner at Denver-based law firm Vicente LLP, told MJBizDaily.

The legal cannabis industry in the United States is expected to experience increased revenue in 2026, according to a new market analysis published by Whitney Economics (WE).

“We are forecasting 2026 legal revenues to be $30.5 billion, an increase of 4.9% since 2025,” WE founder and Chief Economist Beau Whitney said in a recent press release.

Currently, two dozen states in the U.S. have adopted adult-use cannabis legalization, with most of them having launched regulated recreational cannabis sales. A notable holdout from the perspective of regulated adult-use cannabis commerce is Virginia, which adopted a legalization measure in 2021, but isn’t expected to officially permit recreational sales until next year after lawmakers finally approved a commerce bill last month.

In addition to the two dozen states that have adopted adult-use legalization measures, Washington D.C. has also adopted a legalization measure, albeit without permitting regulated adult-use sales. Forty states have adopted medical cannabis legalization measures in the U.S. Washington D.C. has also legalized medical cannabis, including allowing regulated medical sales.