Federal Rescheduling Sparks Turmoil as Ohio Adds to Ban: Advocates Push Back on New Cannabis Policy Shifts

Beyond Ohio’s recent hemp ban, last week President Donald Trump signed an executive order directing federal agencies to reclassify cannabis from a Schedule I to a Schedule III controlled substance, marking a sweeping change to national cannabis policy that will affect every state. This move, the culmination of a policy review process that began under the Biden administration in 2023 has shaken the industry to its core.

Along with Ohio policy, MedicateOH has closely followed the rescheduling process since its inception under the Biden administration, tracking early recommendations from the Department of Health and Human Services, subsequent DEA review, and growing concern from patients and advocates about what rescheduling would — and would not — deliver.

What Does Moving Cannabis to Schedule 3 Do?

Schedule III drugs are recognized as having accepted medical uses and lower potential for abuse than Schedule I substances, which included cannabis alongside drugs like heroin and LSD.

Unlike full legalization or descheduling, rescheduling leaves cannabis squarely within the Controlled Substances Act. While it removes the federal government’s long-standing position that cannabis has “no accepted medical use,” it does not legalize adult use federally or resolve conflicts between state and federal law.

What Rescheduling Means for Patients and Industry

Supporters of rescheduling point to several tangible benefits, but those remain murky. Moving cannabis to Schedule III could dramatically expand federally approved research by reducing administrative barriers that have long limited clinical trials. It may also bring tax relief to state-licensed cannabis businesses by eliminating the application of IRS Section 280E, which currently prevents companies from deducting ordinary business expenses.

At the same time, many advocates caution that the practical impact of rescheduling may be far narrower than it appears. The change does not grant access to traditional banking, does not permit interstate commerce, and does not protect state programs from federal interference. Some fear it could even introduce new regulatory uncertainty, particularly if federal agencies attempt to apply prescription-drug frameworks to plant-based cannabis that has historically been regulated at the state level.

The Risk of Big Pharma Dominance

Schedule III rescheduling could accelerate corporate consolidation and open the door for pharmaceutical companies to dominate the cannabis market. Schedule III substances are typically regulated through FDA-approved drug pathways, which favor patented, single-molecule formulations and large-scale clinical trials — processes that small cultivators, independent processors, and community-based operators are rarely equipped to navigate.

This framework could sideline existing state-legal cannabis programs in favor of pharmaceutical cannabis products controlled by multinational drug companies and managed by traditional pharmacies. Under this scenario, whole-plant cannabis — the foundation of most state medical programs — could be treated as inferior or unapproved compared to FDA-sanctioned cannabinoid drugs, limiting patient choice and access. As many advocates and budtenders know, the whole plant (full spectrum) in forms like RSO have powerful anecdotal evidence of healing cancer and other chronic, hard-to-treat conditions. Without its full expression, the medicine is rendered less effective.

There is also concern that rescheduling could allow pharmaceutical interests to lobby for tighter federal controls, exclusive manufacturing licenses, or prescription-only access models that marginalize dispensaries and push patients into traditional healthcare systems that many already struggle to navigate. For patients who rely on affordable, plant-based cannabis — including those managing chronic pain, PTSD, and other qualifying conditions — this shift could increase costs and reduce autonomy. 

Another worry from advocates is that dispensaries have largely allowed patients to monitor their own doses and forms of administration. If Pharma were to take over supply, we might only see cannabis as a synthetic isolate in pill, liquid or nasal spray form such as Marinol, Epidiolex and Sativex.

For many advocates, the fear is not just corporate involvement, but corporate capture: a future where cannabis is technically legal but practically inaccessible outside of pharmaceutical channels.

Ohio’s Response: Hemp Beverages and a Broader Ban

While federal policy evolves, Ohio’s state government has moved in a even more restrictive direction on intoxicating hemp products. In addition to Governor Mike DeWine signing Senate Bill 56 last week banning most intoxicating hemp products, DeWine used his line-item veto to remove a provision that would have allowed continued sales of THC beverages under state law, arguing that uniform prohibition would simplify enforcement as federal rules change.

Bobby Slattery, founder of 50 West Brewing Company, expressed dismay at the sudden policy shift. “I was completely shocked,” Slattery said after the governor vetoed language that would have preserved THC beverages in Ohio.

Slattery has emphasized that the ban threatens jobs, consumer choice, and a rapidly growing segment of the regulated market. “It would have a major impact on jobs inside the state and to our consumers that are drinking these,” he said, noting that demand for hemp-derived beverages surged even as regulatory uncertainty increased.

Advocacy Groups Mobilize Against State Law

Dennis Willard, spokesperson for Ohioans for Cannabis Choice PAC, sharply criticized SB 56 as a direct contradiction of voter intent and announced a referendum campaign to attempt to reverse the changes. 

“SB 56 forcefully defies the will of the voters of Ohio, who spoke clearly on this issue, and denies the people of Ohio the freedom to use these products for their personal use,” Willard said. “We are launching a referendum campaign to go directly to voters. We believe voters will say no to government overreach, no to closing 6,000 small businesses and pink-slipping thousands of workers across the state, and no to once again recriminalizing hemp and marijuana.”

What Rescheduling Could Mean for Dispensaries

For dispensaries, Schedule III introduces uncertainty rather than clarity. While rescheduling could remove tax penalties, it does not protect dispensaries from federal regulatory shifts that might favor pharmacies, pharmaceutical distributors, or hospital systems over existing cannabis retailers.

If federal regulators impose prescription-only requirements without preserving state dispensary systems, dispensaries could be sidelined in favor of traditional pharmacy channels. This outcome would fundamentally alter patient access, eliminate community-based cannabis expertise, and consolidate control within the pharmaceutical supply chain.

It’s important to note that none of these outcomes are final. The executive order initiates regulatory action, but implementation details will be shaped by federal agencies, courts, and public pressure.

The Road Ahead for Ohio

As Ohio prepares to implement its intoxicating hemp ban in early 2026, advocates are expected to be vocal. The state’s approach risks shrinking legal options even as voters have repeatedly expressed support for broader cannabis access.

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