{"id":10950,"date":"2025-12-18T20:03:54","date_gmt":"2025-12-18T20:03:54","guid":{"rendered":"https:\/\/cannabisindustryjournal.com\/?post_type=news_article&amp;p=38144"},"modified":"2025-12-18T20:03:54","modified_gmt":"2025-12-18T20:03:54","slug":"trump-reschedules-cannabis","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/trump-reschedules-cannabis\/","title":{"rendered":"Trump Reschedules\u00a0Cannabis!"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/trump-reschedules-cannabis\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><div><img src=\"https:\/\/cannitrol.com\/blog\/wp-content\/uploads\/2025\/12\/trump-reschedules-cannabis.jpg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span data-preserver-spaces=\"true\">The moment many in the cannabis industry have been waiting for has finally arrived. Operators, investors, and advocates are cautiously celebrating President Trump\u2019s executive order directing the Department of Justice to finalize the rescheduling of cannabis to Schedule III, an action many hope is a stepping stone toward full federal descheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Full descheduling would free the industry by treating cannabis like alcohol or tobacco by eliminating federal scheduling, ending arrests, removing state vs. federal silos, and enabling interstate and international trade.<\/span> <span data-preserver-spaces=\"true\">This<\/span> <span data-preserver-spaces=\"true\">would allow national supply chains, economies of scale, access to banking, and provide greater appeal to institutional investors.<\/span><\/p>\n<h4><strong>Industry Caution<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Not everyone in the industry is celebrating. Josh Kesselman, publisher of<\/span> <em><span data-preserver-spaces=\"true\">High Times<\/span><\/em> <span data-preserver-spaces=\"true\">and founder of RAW\u00ae Rolling Papers, warns that rescheduling could introduce new federal risks for state-legal operators.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cI, among others in the industry, am very concerned that this rescheduling could be a false flag,\u201d Kesselman says. He argues that moving THC to Schedule III could allow large pharmaceutical companies to dominate the market with synthetic THC products available only by prescription, while exposing dispensaries and cultivators to a new category of federal criminal liability under the Food, Drug, and Cosmetic Act (FDCA).<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Kesselman cautions that businesses could face charges including selling a prescription drug without a license, dispensing without a prescription, misbranding a drug, illegal distribution, and conspiracy. \u201cIn fact,\u201d he adds, \u201cthe penalties under Schedule III actually increase, not decrease, depending on what a federal prosecutor chooses to charge a seller or grower with.\u201d<\/span><\/p>\n<h4><strong>The Case for Patients and Veterans<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Harrison Bard, CEO and co-founder of Custom Cones USA and DaySavers, sees rescheduling as a long-overdue recognition of cannabis as a legitimate therapeutic option\u2014particularly for veterans.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cFor years, veterans have faced stigma, inconsistent access, and significant out-of-pocket costs managing chronic pain, PTSD, and other service-related conditions,\u201d Bard says. \u201cVeterans have carried the weight for the rest of us. It\u2019s time our policies\u2014and our industry\u2014carry some of it back.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Gennaro Luce, founder and CEO of CannaLnx, echoes the sentiment but emphasizes that rescheduling alone is not enough to improve patient access.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cMoving cannabis to Schedule III is an important step,\u201d Luce says. \u201cBut without insurance verification, compliance, and eligibility frameworks, patients will still struggle to receive coverage for medical cannabis.\u201d<\/span><\/p>\n<h4><strong>The Biggest Impact of All<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Financial executives see both promise and caution in rescheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Terry Mendez, CEO of Safe Harbor Financial, notes, \u201cReclassifying cannabis as Schedule III acknowledges its medical legitimacy and corrects decades of misguided federal policy, but rescheduling is not reform.\u201d Compliance burdens, cash dependency, and Bank Secrecy Act obligations would remain, keeping many financial institutions cautious.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Anthony Coniglio, CEO of NewLake Capital, highlights one immediate benefit tied to rescheduling: relief from the financial constraints that have distorted cannabis operators\u2019 balance sheets for years. \u201cThis isn\u2019t about legalization,\u201d he says.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Adam Stettner, CEO of FundCanna, agrees. \u201cEliminating 280E changes the math overnight,\u201d he says. \u201cIt also accelerates research, encourages standardized formulations, and nudges the industry toward institutionalized compliance and reporting.\u201d<\/span><\/p>\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.headset.io\/blog\/what-schedule-iii-could-mean-for-the-cannabis-industry\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Headset\u2019s<\/span><\/a> <span data-preserver-spaces=\"true\">latest analysis shows that while the U.S. cannabis industry continues to grow in consumer demand, it is operating under increasing financial strain. Retail margins have compressed significantly\u2014falling from 52.6% in 2021 to about 42.7% year to date in 2025\u2014leaving operators focused on cash preservation rather than expansion. This pressure does not stop at the retail level; it ripples across brands, distributors, and service providers that depend on healthy retail purchasing and payment cycles.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">At the center of this strain is Section 280E, which prevents many cannabis businesses from deducting ordinary operating expenses for federal tax purposes.<\/span> <span data-preserver-spaces=\"true\">Headset\u2019s<\/span> <span data-preserver-spaces=\"true\">modeling of more than 2,100 stores across 24 states shows that under the<\/span> <span data-preserver-spaces=\"true\">current<\/span> <span data-preserver-spaces=\"true\">280E treatment, the median retailer in nearly half of those states operates at a negative after-tax profit.<\/span> <span data-preserver-spaces=\"true\">In some markets, federal tax obligations exceed total net profit, constraining hundreds of thousands of dollars per store each year and increasing fragility throughout the supply chain.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If cannabis<\/span> <span data-preserver-spaces=\"true\">is rescheduled<\/span> <span data-preserver-spaces=\"true\">to Schedule III and 280E<\/span> <span data-preserver-spaces=\"true\">is removed<\/span><span data-preserver-spaces=\"true\">, the impact on cash flow could be substantial. Headset estimates that the typical median retailer would recover roughly $268,000 per year in federal tax drag, with high-volume stores seeing as much as $805,000 annually. At the industry level, this translates to an estimated $1.6 billion to $2.2 billion in incremental after-tax cash flow at current sales levels.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">While retailers would feel the most immediate relief, Headset notes that the broader ecosystem would benefit through more consistent inventory purchasing, improved payment timelines for brands and distributors, increased investment in marketing and product innovation, and greater operational stability. For an industry supporting roughly 425,000 full-time equivalent jobs, improved cash flow is less about rapid expansion and more about sustainability\u2014supporting restored hours, reduced turnover, and long-term reinvestment.<\/span><\/p>\n<h4><strong>The Case for Small Businesses<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Small operators see rescheduling as a potential lifeline.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Levar Thomas, co-founder of CPG brand Silly Nice, says, \u201cAccess to banking and meaningful tax relief could finally level the playing field.\u201d He emphasizes that rescheduling makes funding, scaling, and basic compliance far more achievable, and hopes it will accelerate expungements and releases for those still incarcerated.<\/span><\/p>\n<h4><strong>Nonprofits and Social Justice<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Betty Aldworth, co-executive director of MAPS and chair of the Marijuana Policy Project (MPP), cautions that rescheduling alone will not undo the harms of prohibition.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cRescheduling is a symbolic victory,\u201d Aldworth says. \u201cBut cash-only operations remain dangerous, consumers still face housing, immigration, and workplace risks, and patients lack regulatory clarity for insurance coverage.\u201d She adds, \u201cCannabis policy must catch up to political reality. Anything less isn\u2019t reform\u2014it\u2019s delay.\u201d<\/span><\/p>\n<h4><strong>What Does Implementation Look Like?<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Cannabis Regulations Association (CANNRA) submitted a comment on the proposed federal rule rescheduling marijuana, highlighting the process that still needs to happen once President Trump flips the switch.<\/span> <a class=\"editor-rtfLink\" href=\"https:\/\/www.cann-ra.org\/news-events\/cannra-comment-on-the-proposed-federal-rule-rescheduling-marijuana\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">They stated<\/span><\/a> <span data-preserver-spaces=\"true\">that the comment does not take a position on rescheduling, but<\/span> <span data-preserver-spaces=\"true\">rather<\/span> <span data-preserver-spaces=\"true\">focuses on<\/span> <span data-preserver-spaces=\"true\">the implementation of<\/span> <span data-preserver-spaces=\"true\">the proposed federal rescheduling in U.S. states and territories.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The comment calls for additional federal guidance in six areas to support state and territorial regulators in being able to implement the policy:<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">1. Guidance is needed on how federal priorities, including enforcement priorities, will change under the proposed rescheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">2. Guidance is needed on how federal agencies will engage with states and territories under the proposed rescheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">3. Guidance is needed on how state governments can interact with each other under the proposed rescheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">4. Guidance is needed on how research processes and protocols will change under the proposed rescheduling.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">5. Guidance is needed on how to regulate cannabinoids that appear in two different places on the schedule due to the federal legalization of hemp.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">6. Guidance is needed on how the proposed rescheduling will impact banking and finance directives and policies.<\/span><\/p>\n<h4><strong>Global Impact<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Even short of full descheduling, U.S. policy shifts are already resonating globally. JP Doran, CEO of Crucial Innovations Corp., notes, \u201cWhile rescheduling stops short of legalization, it reduces research barriers, modernizes oversight, and formally acknowledges medical value.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Because the U.S. is the world\u2019s largest pharmaceutical market, this move may prompt regulators in the UK, EU, South Africa, and other markets to reassess outdated frameworks, harmonize quality standards, and expand patient access. \u201cAs global markets respond, rescheduling has the potential to accelerate the development and distribution of next-generation cannabis medicines,\u201d Doran adds.<\/span><\/p>\n<h4><strong>Looking Ahead<\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">\u00a0According to multiple reports, Trump also plans to establish a federal commission by summer 2026 to study full descheduling as \u201cphase two,\u201d signaling that additional reforms could follow the initial administrative action.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Vince C. Ning, co-CEO and co-founder of Nabis, says. \u201cThe next transformation comes when interstate commerce barriers fall, allowing a national cannabis infrastructure to scale responsibly, innovate faster, and deliver safer, more efficient access for consumers.\u201d As Ning puts it, \u201cThis is a watershed moment. Now it\u2019s up to operators, advocates, and policymakers to sustain momentum and shape what comes next.\u201d<\/span><\/p>\n<p><a href=\"https:\/\/cannabisindustryjournal.com\/news_article\/excerpts-from-president-trumps-historic-executive-order\/\">READ EXCERPTS<\/a> FROM THIS HISTORIC PRESS CONFERENCE.<\/p>\n<div class=\"sharedaddy sd-sharing-enabled\">\n<div class=\"robots-nocontent sd-block sd-social sd-social-icon-text sd-sharing\">\n<h3 class=\"sd-title\">Share this:<\/h3>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The moment many in the cannabis industry have been waiting for has finally arrived. Operators, investors, and advocates are cautiously celebrating President Trump\u2019s executive order directing the Department of Justice to finalize the rescheduling of cannabis to Schedule III, an action many hope is a stepping stone toward full federal descheduling. Full descheduling would free [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6913,5062,8509,9290,10851,5763,9,10812,10819,10475,1,3,61,1736],"tags":[6914,5063,8535,9295,10852,5771,10813,10820,10482],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/10950"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=10950"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/10950\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=10950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=10950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=10950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}