In a long-awaited announcement, the Drug Enforcement Agency (DEA) agreed to reschedule cannabis from a Schedule I to a Schedule III narcotic. Additional steps, including a public comment period and White House approval, must be completed to finalize the reclassification. But for all intents and purposes, a significant milestone appears to have been reached.
The news sent shockwaves through a market and community often riddled with down times in recent years. Across the industry, legal, and advocacy circles, most considered the news a positive step forward, citing expected benefits to medical research and business operations. However, many voiced concerns over the reclassification’s impact on equity, social justice, and market prosperity.
Cannabis & Tech Today compiled quotes from across the industry regarding the rescheduling of cannabis, with excerpts below.
The Cannabis Industry Reacts
Ryan Magee, Partner, McCarter & English
“For many, this may come as a mild disappointment. While rescheduling is a step in the right direction, many advocates and policymakers saw this as an opportunity for DEA to de-schedule cannabis altogether. It doesn’t look like that is happening.”
Michael Harlow, CPA, Office Managing Partner – Bethesda and Managing Partner – Cannabis Industry, CohnReznick
“From a financial standpoint, the news of DEA rescheduling cannabis to a Schedule III Narcotic is absolutely critical. IRC 280e does not apply to Schedule III Narcotics, so cannabis companies will calculate their income tax liability using the same formula as every other operating business in the country when rescheduling is finalized.
Morgan Paxhia, Co-founder, Poseidon Investment Management
“Shifting it to Schedule 3 or better is urgently needed for industry benefits. We anticipate a surge in liquidity as sidelined capital enters the market, drawn by the potential for legal businesses to thrive.”
Jason Wild, Executive Chairman, TerrAscend
“Today’s news is a critical first step towards aligning US cannabis laws with scientific evidence. TerrAscend looks forward to the positive impact that today’s news will have on patients, consumers, and the industry.”
Socrates Rosenfeld, CEO and Co-Founder, Jane Technologies
“While we applaud this decision, our commitment persists until full federal legalization is achieved, and individuals incarcerated for cannabis-related offenses are liberated. Nevertheless, we should commemorate the moment and all the hard work our industry has put in so far. We have momentum – and the future of cannabis in America is bright.”
Brady Cobb, CEO/Founder, Sunburn Cannabis
“This is one of the most historic moments in the decades-long fight to end the US government’s failed war on the cannabis plant…A tremendous amount of work has been done by so many people, and while I’ve been critical of the Biden administration on the timing of this move, credit is due for actually making it happen. Onward.”
Wendy Bronfein, Co-Founder/Director of Public Policy/Chief Brand Officer, Curio Wellness
“While this move to Schedule III could provide much-needed relief from the crushing tax burden of 280e, we must seek a balance between exercising federal oversight and enforcement responsibilities while preserving each state’s ability to determine the best approach to cannabis within its borders.”
Omar Delgado, VP of Retail, Ivy Hall
“The proposed removal of cannabis from its unjust Schedule 1 classification marks a historic day for our industry. For years, the cannabis industry has faced undue scrutiny and legal hurdles due to its classification which has perpetuated harmful stereotypes and disproportionately impacted marginalized communities, particularly communities of color.”
Deborah Saneman, CEO, Wurk
“This accomplishment is a testament to the hard work and dedication of our industry’s efforts to normalize the economies of cannabis. Our industry has demonstrated remarkable resilience; adapting swiftly to unforeseen challenges while delivering high-quality, safe products.”
Leah Heise, CEO, Gemini Twin Consulting
“I am excited that we have seen forward momentum towards rescheduling. There are lots of unknowns that need to be navigated but I am relieved to see a measure of progress. We will have some confusing times ahead as an industry, but if any sector can figure this out, it is cannabis.”
Nicolas Guarino, CEO, Naturae (Jaunty)
“The U.S. DEA’s plans to accept health regulators’ recommendation to reschedule cannabis from Schedule I to Schedule III is an important step, but as the CEO of a company operating within New York’s licensed adult-use cannabis industry, the real impact of this decision remains to be seen. Rescheduling will of course be a boon to the country’s medical cannabis market, but the adult-use markets of 24 states and D.C. – which are much larger and have higher total revenues by roughly 6 times – still face great limitations that hinder the legal industry from reaching its full potential.”
Niklas Kouparanis, CEO, Frankfurt-based Bloomwell Group
“The rescheduling of cannabis in the U.S. can broaden access to cannabis for medical purposes and may lawfully be dispensed by prescription…Germany reclassified cannabis as of April 1 and can now serve as a guide for the forecasted expansion of the U.S. medical cannabis industry under this change…We can expect to see the same rise in demand that we’ve seen in Germany in the U.S. under reclassification.”
John Hartmann, CEO, Ascend Wellness
“This favorable industry development could improve customer and patient access, enhance access to funding, provide broader research avenues, and more.”
John Mueller, Founder and CEO, Greenlight
“This is a major nail in the coffin on a failed 50-year prohibition policy. Good riddance, let it rest in peace. We’re finally headed in the right direction after all these years, but we still have a long way to go.”
Sundie Seefried, CEO, Safe Harbor Financial
“The profound impact of rescheduling cannabis from Schedule I to Schedule III would signify a crucial shift in the perception of cannabis, recognizing its medical potential and solidifying its legitimacy in the financial realm…Elevating cannabis to Schedule III demonstrates the United States’ leadership on an international scale, and has the potential to positively influence agreements and international treaties with organizations like the United Nations and World Health Organization.”
Anthony Coniglio, President, Chief Executive Officer and Director, NewLake Capital Partners
“We project that our tenants stand to collectively save over $400 million annually in taxes, leading to increased cash flows for their businesses. Moreover, this pivotal move by the federal government is poised to stimulate additional investment in the sector, potentially enabling operators to strengthen their balance sheets, thus enhancing the industry’s credit quality, including our tenant base.”
Adam Wilks, CEO, Carma HoldCo
“Embracing this momentous shift in marijuana classification isn’t just about changing policies; it’s about a new era of understanding and opportunity…This reclassification will not be just a regulatory adjustment; it’s a validation of what we’ve known all along: cannabis isn’t a threat; it’s a solution. It’s time to rewrite the narrative, break down barriers, and usher in a future where cannabis is celebrated for its potential to heal, inspire, and empower.”
Jon Levine, CEO and President, MariMed, Inc.
“The positive impact this will have cannot be overstated. Our industry, the millions of consumers and patients we serve, and the individuals and communities that have been ravaged by the War on Drugs, all will see positive benefits. So too will those investors who have supported this industry for many years, patiently waiting for a major federal catalyst such as this.”
J. Smoke Wallin, Managing Director, STS Capital Partners
“We expect a huge uptick in M&A activity after more than two years of difficult capital markets and distress in the industry…Cannabis is here to stay in the United States, Congress needs to act now to clean up the mess and support an industry with 100s of thousands of people and millions of consumers benefiting.”
Terrence White, Founder and CEO, Monko
“This will finally put an end to the 280E tax burden on legal operators which is a step in the right direction. We still have a long road ahead to achieve full federal legalization, which remains the ideal scenario. We also need to see meaningful action from the federal government to support social equity and restorative justice for communities most harmed by cannabis prohibition. While encouraged by this progress, our work is far from over.”
Saki Fenderson, Director of Events, On The Revel
“Many in the business community are celebrating today’s announcement of the impending rescheduling of cannabis. However, our focus has always been on comprehensive policy reform and the full integration of the plant into society.”
Paul Yau, CEO and Co-Founder, The Travel Agency
“We are extremely optimistic about this proposed rescheduling. It will mean we will be able to deduct basic expenses such as wages, rent and marketing like all other businesses in our federal tax return. For our not-for-profit partner, The Doe Fund, this will mean more funding for programming that supports their homeless and formerly incarcerated clients with shelter, job training and employment.”
Steve Reilly, Partner and General Counsel, INSA
“Today is an incredibly inspiring day in the cannabis industry. We are motivated by the DEA’s recommendation for reclassification of cannabis from Schedule I to Schedule III. This moment represents a significant shift in not only the localized cannabis industry, but also in the way our country views the nation’s entire cannabis enterprise…We are also eager for the medical research opportunities this may lead to.”
Vladimir Bautista, CEO and Co-Founder, Happy Munkey
“Today’s rescheduling of cannabis represents a beacon of hope for small businesses like mine, burdened by the weight of the 280E tax code. As a devoted cannabis advocate, I see this as a transformative moment—a chance to right the wrongs of the past. Let us not forget the thousands incarcerated unjustly for cannabis. None of us are free until we are all free.”
Christopher Louie, Co-Founder, Made in Xiaolin:
“This is a bittersweet moment for us. While rescheduling cannabis is a step in the right direction, it’s definitely not solving any real problems that we all deal with on a daily basis such as access to capital, banking, tax deductions and more. What we really need is for the government to deschedule cannabis altogether and stop treating it as a deadly drug that should be ultra-regulated.”
Dotan Y. Melech, Founder and CEO, CTrust:
“While we will ultimately need to wait and see how FINCEN changes their required Suspicious Activity Report (SAR) for cannabis businesses, Schedule III will create curiosity and motivation for banks and lenders looking at cannabis. Our industry will need normalization and standardization in how the capital is deployed and who gets that capital. The reality is that current lending practices are unlikely to change without better understanding cannabis risk.”
John Moynan, CEO, SLANG Worldwide:
“The decision to reschedule cannabis at the federal level is a step forward for the cannabis industry. Businesses with operational issues due to 280E no longer have those same issues. From a purely financial standpoint, as a result of this news, we now have a set of really lean businesses that are now free cash-flowing and can engage in M&A and financing that wasn’t previously available. This news opens doors that have been closed for a long time.”
Bob Hoban, Chairman of the Board, CTrust:
“The decision to reschedule cannabis to a Schedule III drug is a monumental step in the right direction for the industry, especially from a financial standpoint. Now that the federal government has officially acknowledged cannabis as being less harmful than alcohol and containing medicinal benefits, more banks and lenders will open up lines of credit, debt and loans to companies.”
Leili Fatehi, Partner and Principal, Blunt Strategies
“While rescheduling opens doors for medical research and economic development, it’s essential to acknowledge that it’s just the beginning. We must remain vigilant in advocating for policies that prioritize social equity and justice, ensuring that the benefits of cannabis legalization are accessible to all communities.”
Kevin Hart, CEO and Founder, Green Check
“We will all have to wait and read exactly what it says. The blanket of Schedule III, and for cannabis and derivative products will need to be fully understood. What we do know that we can expect are more, not less, rules and regulations around the supply chain from sourcing to final sellable products. This isn’t simply flipping a switch and telling the market it is now free, it isn’t.”
Dominick Volpini, Co-Founder, Cloudious9
“These developments will profoundly shape the future of cannabis consumption methods…Looking ahead, we anticipate increased federal oversight over consumption methods, heralding a new era of cannabis regulation. An example is we anticipate that any products used for medical cannabis consumption will undergo formal FDA medical device registration in the future.”
Saphira Galoob, Executive Director, National Cannabis Roundtable
“While NCR continues to call for federal action to address criminal justice reform and empower existing state programs, rescheduling marks a monumental shift in federal cannabis policy as our fight to end prohibition continues. We applaud President Biden for his courage and leadership in setting this process in motion, and we thank the due diligence of the DOJ and HHS in carrying out this process and coming to a decision based soundly in science that we hope to see swiftly finalized, opening up the doors for further important medical research and alleviating the insurmountable tax burden imposed under 280E.”
Matthew Schweich, Executive Director, Marijuana Policy Project
“This is a positive step forward for federal cannabis policy, however it is a rather modest step given the strong support among American voters for comprehensive cannabis reform…It is important to acknowledge that this rescheduling would not affect the criminalization of medical cannabis patients and cannabis consumers under state laws – so we must continue the work of enacting sensible and fair cannabis legalization and medical cannabis laws through state legislatures and ballot initiatives.”
Last Prisoner Project statement
“While the action could result in some favorable tax and banking reform for the cannabis industry and more dedicated research for cannabis patients, there are no changes in how the criminal legal system punishes cannabis users. Rescheduling is a peripheral change that signals the reevaluation of cannabis, but not the release of cannabis prisoners or relief for those who continue to be burdened by the lasting consequences of the carceral system. In short, this announcement represents progress but not justice.”
Alice Moon, Publicist
“As a patient living with Cannabinoid Hyperemesis Syndrome, I am excited for the opportunity for research that rescheduling will allow for. While there’s still a long way to go to make cannabis completely accessible by all, I think this is a step in the right direction.”
Minority Cannabis Business Association statement
“Under the leadership of President Biden, this move signifies a departure from outdated approaches to drug regulation and a step towards equitable opportunities in the cannabis industry. As a trade association dedicated to serving the needs of minority cannabis businesses and communities, we believe rescheduling cannabis will open doors for economic empowerment and social justice.”
Lou Rinaldi Connecticut Medical Cannabis Patient and Advocate Eyes of Argus
“I worry about states with existing home grow rights. I worry about further normalization of plant adulteration as part of industrial-scale production. I congratulate capital on achieving their golden parachute; cue the M&A frenzy. But mostly I worry that this is a half-measure during an election year that will likely never be lobbied further in a populist direction.”
Chelsea Higgs Wise, executive director of Marijuana Justice (via United for Decriminalization group statement)
“The DEA’s proposal to reschedule marijuana would continue criminalization and as a result is inconsistent with the Biden Administration’s promises, especially to Black and Brown people, regarding marijuana decriminalization and expungement.”
