Researcher Taking a Few Cannabis Buds for Scientific Experiment.
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The announcement of the rescheduling of medical cannabis products this week has been one of the most significant policy shifts in the U.S. cannabis industry and broader drug policy in years, which is set to potentially ease barriers for researchers who study cannabis.
The Department of Justice and the Drug Enforcement Administration moved cannabis products approved by the Food and Drug Administration and products covered by qualifying state medical cannabis licenses to the Schedule III category under the Controlled Substances Act. Meanwhile, a separate expedited administrative hearing beginning June 29 will consider whether cannabis should also be rescheduled from the highly restrictive Schedule I category to the less restrictive Schedule III.
The decision comes after President Donald Trump’s December executive order to speed up cannabis rescheduling, at a time when medical cannabis is legal in 40 states, three territories, and Washington, DC, and recreational use is allowed in 24 states and DC, creating an industry whose sales are projected to exceed $47 billion this year, according to market researcher BDSA, as reported by Reuters.
While the federal rescheduling of medical cannabis products does not amount to full cannabis rescheduling, and even less to legalization, it marks a significant policy shift that could ease barriers to scientific research under federal controls. The move also raises the question of whether cannabis research has been driven primarily by federal restrictions or whether legalization has steered companies toward marketable products rather than clinical evidence.
This is what economists Lucy Xiaolu Wang and Nathan W. Chan of the University of Massachusetts Amherst have tried to answer by publishing a recent study in the International Journal of Industrial Organization.
Their findings show that legalization has indeed stimulated innovation, but primarily the kind that can be commercialized quickly, rather than the slower, more expensive process of rigorous medical research.
“Legalization increases innovation in the cannabis market, but with relatively weak gains in areas pertinent to health and safe use,” the study reads.
To reach this conclusion, researchers have analyzed state legalization in the U.S., distinguishing between two forms of innovation.
The first is clinical trials, which involve human participants that test efficacy, side effects, dosage, and health outcomes. For this category, authors have built a dataset of 856 cannabis-related clinical trials worldwide conducted between 2000 and 2020, of which 559 were U.S.-based. The second is patent activity, which helps capture inventions and commercial ideas developed by companies’ research and development departments to launch their products, such as vaporizers and edibles. They identified 1,706 cannabis-related U.S. patent applications filed between 2000 and 2019.
Their findings show that state legalization didn’t produce a significant increase in clinical trials. The average state-year recorded only 0.81 cannabis trials, and neither medical nor recreational legalization generated a meaningful rise.
Instead, patenting activity rose sharply, particularly after recreational legalization. The average state-year had 2.32 cannabis patents, but recreational legalization increased that figure by 4.383 patents, nearly tripling innovation activity.
“We do not find evidence of a response in clinical trials to medical cannabis legalization in the US, suggesting that state MCLs [medical cannabis legalizations] do not make cannabis clinical research much easier,” the authors wrote. “Point estimates suggest a stronger RCL [recreational cannabis legalization] effect on clinical trials, but these estimates are not statistically significant.”
The authors also highlighted that “the gap between limited medical R&D and the meteoric growth in cannabis consumption imposes potential health concerns,” such as the EVALI outbreak of 2019–2020, due to a “lack of high-quality products and rigorous research.”
In practice, a cannabis company operating in a state where cannabis is legal may be more likely to generate revenue quickly by launching a new product than by spending years funding clinical trials to determine whether cannabis helps treat specific medical conditions.
The authors of the study attribute this gap to federal rules that have limited scientific research, even as more states have legalized cannabis.
Since cannabis is still tightly restricted under federal law, researchers who study cannabis often face long approval processes, limited access to research-quality cannabis, funding challenges, and hesitation from universities and hospitals to support the work.
That is what makes this week’s rescheduling decision so significant. Expanding medical cannabis research may lower barriers. However, this wouldn’t mean an automatic surge in clinical trials, as commercial incentives remain powerful in a way that cannabis companies may still prefer to invest in R&D to commercialize new products.
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