ANN ARBOR – President Donald Trump’s decision to move marijuana out of the most restrictive federal drug category marks real progress in U.S. cannabis policy — progress that’s been a long time coming.

By directing federal agencies to reschedule marijuana from Schedule I to Schedule III, the administration is finally acknowledging what science, voters, and state regulators have recognized for years: cannabis has legitimate medical uses, and treating it like heroin never made sense. The move should make research easier, reduce regulatory friction, and signal to investors and institutions that federal cannabis policy is slowly catching up with reality.

But while Washington celebrates progress on marijuana, it is simultaneously putting the legal hemp and CBD industry at serious risk — and that contradiction should alarm business owners, farmers, and policymakers in Michigan and across the country.

Progress on One Front, Damage on Another

Buried in recent federal legislation is a redefinition of “hemp” that tightens THC limits so severely that many products legally sold today would no longer qualify as hemp. The change doesn’t just close loopholes — it threatens to wipe out large portions of the current hemp and CBD market.

Blain Bechtold, president of the Industrial Hemp Association of Michigan, has warned that the shift could effectively dismantle the industry that has grown since hemp was legalized under the 2018 Farm Bill. By basing legality on strict total-THC thresholds per container — rather than plant type, dosage, or intended use — Bechtold says many full-spectrum hemp products could become illegal overnight, despite being safely produced and widely used for years.

In practical terms, he argues, Congress isn’t refining regulation. It’s erasing an entire category of lawful commerce — along with years of private investment, infrastructure, and job creation.

Why This Hits Michigan Especially Hard

Michigan sits at the crossroads of cannabis, agriculture, manufacturing, and regulated innovation — which makes the stakes unusually high.

Michigan’s legal cannabis industry now supports more than 46,000 full-time-equivalent jobs, ranking the state among the top cannabis employment markets in the nation. Those jobs span cultivation, processing, testing labs, logistics, and retail, and are supported by more than $3 billion in annual cannabis sales.

Layered on top of that is Michigan’s hemp and CBD economy — a sector that doesn’t show up cleanly in workforce statistics but still supports hundreds to potentially thousands of additional jobs across farming, extraction, lab testing, packaging, distribution, and small retail. These businesses are especially concentrated in rural communities and among small manufacturers that rely on regulatory stability to survive.

A sudden federal redefinition of hemp would force many Michigan companies to write off inventory, idle equipment, and reconsider hiring — not because they violated the law, but because the law changed underneath them.

Michigan Explainer: How the Federal Hemp Change Collides With State Law

Michigan law draws a clear distinction between state-licensed marijuana and federally legal hemp products.

Under Michigan’s framework:

  • Marijuana products must be sold through licensed dispensaries and tracked through the state’s seed-to-sale system

  • Hemp-derived CBD products can be sold through wellness stores, farm markets, and online, provided they meet federal hemp standards

The problem is that Michigan’s hemp market was built around the 2018 federal definition of hemp, not the newly tightened version.

If the federal definition changes without a corresponding state fix, Michigan businesses could face:

  • Legal hemp products becoming illegal in interstate commerce

  • Increased enforcement uncertainty despite state-level compliance

  • Pressure to enter the adult-use marijuana licensing system — a far more expensive and complex process

For small hemp operators, that shift isn’t realistic. Adult-use marijuana licensing involves higher capital requirements, stricter zoning rules, and ongoing compliance costs that many CBD and wellness businesses were never designed to absorb.

In effect, a federal definition change could collapse Michigan’s hemp market into a regulatory no-man’s-land, even as the state’s marijuana market continues to expand.

The Policy Disconnect

What makes this moment so frustrating is the lack of coherence in federal policymaking.

On one hand, regulators are signaling that cannabis should be treated more like a regulated medicine than a criminal substance. On the other, Congress is advancing definitions that could outlaw hemp products derived from the same plant family, sold to the same consumers, and produced under legal frameworks the federal government itself created.

Bechtold has emphasized that the hemp industry isn’t asking for deregulation or loopholes. It’s asking for science-based policy: clear standards for testing, labeling, dosage, and consumer safety. Instead, the industry faces blunt statutory changes that create uncertainty rather than clarity — a worst-case scenario for small and mid-sized employers.

What Washington Needs to Fix — Now

Rescheduling marijuana is a milestone. But milestones don’t matter if policymakers trip over the next step.

If federal leaders want meaningful cannabis reform, they must follow through by:

  • Fixing the federal hemp definition to preserve lawful full-spectrum products while enforcing real safety standards

  • Aligning hemp and marijuana policy so businesses aren’t whipsawed by conflicting rules

  • Providing regulatory certainty so farmers, manufacturers, labs, and retailers can invest, hire, and innovate without fearing sudden policy reversals

Cannabis reform shouldn’t create winners by accident and losers by neglect.

Michigan’s economy benefits when innovation is paired with predictable regulation. It suffers when Washington sends mixed signals that destabilize entire industries overnight.

Rescheduling marijuana is progress. Undermining hemp at the same time is not.

Federal policymakers need to finish the job — and stop breaking one legal industry while modernizing another.

Mike Brennan
Editor & Publisher, MITechNews.com
Covering technology, business, and policy at the intersection of innovation and regulation