In a landmark executive order signed Thursday, President Donald Trump directed federal agencies to reclassify marijuana from Schedule I to Schedule III under the Controlled Substances Act. This policy shift recognizes the plant’s established medical benefits and lower risk of abuse, marking the most substantial federal cannabis reform since its prohibition over five decades ago. While not equivalent to full legalization, the change aims to align regulations with scientific evidence and public opinion, potentially transforming the industry.
Understanding the Policy Change
Under the Controlled Substances Act, drugs are categorized into five schedules based on their medical value and potential for abuse. Schedule I includes substances like heroin, deemed to have no accepted medical use and high abuse risk. Schedule III, however, covers drugs like certain steroids or ketamine, which have recognized medical applications and moderate to low abuse potential.
For the average person, this means cannabis is no longer treated as one of the most dangerous drugs federally. It opens doors for easier medical research, as scientists won’t need special approvals to study it. Patients might gain better access through prescriptions, though recreational use remains illegal at the federal level. State laws allowing adult-use or medical cannabis continue unchanged, but federal enforcement could soften, reducing conflicts between state and national rules. Importantly, it doesn’t decriminalize possession without a prescription, and manufacturing or sales outside regulated channels stay restricted.
Economic Relief for Businesses
One of the most immediate effects is financial: the end of IRS Section 280E, which has barred cannabis businesses from deducting ordinary expenses like rent or salaries because they deal in a Schedule I substance. This has led to tax rates as high as 70 to 90 percent for operators, stifling growth. With rescheduling, companies can now claim these deductions, potentially dropping rates to around 20 percent, similar to other industries. This could free up capital for hiring, expansion, and innovation, while attracting more investment and banking services.
Brian Vicente, Founding Partner at Vicente LLP, a leading cannabis law firm, noted, “This monumental change will have a massive, positive effect on thousands of state-legal cannabis businesses around the country.” His colleague Charles Alovisetti added that it “signals federal acceptance of the state-legal cannabis market,” forecasting a surge in deals and reforms.
Jason Wild, Executive Chairman at TerrAscend, a multi-state operator, called it “a game-changer,” highlighting “clarity on 280E, lower cost of capital, and the ability to compete on a level playing field.”
Cy Scott, Co-Founder and CEO of Headset, a data platform, explained the practical side: “Removing 280E would create an instant improvement in cash flow, allowing operators to stabilize their businesses rather than simply survive quarter to quarter.”
Industry Leaders Weigh In
Leaders from across the sector have hailed the move as validation after years of advocacy, though many stress it’s just a starting point.
Ben Kovler, Founder and CEO of Green Thumb Industries, said, “Rescheduling cannabis to Schedule III affirms what millions of Americans already know: cannabis works.” He praised its benefits for patients, including veterans managing chronic conditions.
Cristy Aranguiz, CEO of Cannabis & Glass, shared a personal view: “Today’s decision is a monumental step forward for both businesses like mine and the patients who rely on it every day,” emphasizing its role in pain relief and quality of life.
Omar Delgado, VP of Retail at Ivy Hall Dispensary, focused on equity: “Any move away from Schedule I isn’t just progress for cannabis businesses. It’s progress for justice and freedom.”
Deborah Saneman, CEO of Würk, admired the sector’s perseverance: “This shift brings cannabis businesses closer to operating like companies in any other industry with greater access to liquidity and fairer financial treatment.”
Socrates Rosenfeld of Jane Technologies welcomed the science-based approach, hoping for “broader, systemic reform needed for a truly just and accessible industry.”
Michael Johnson of Metrc described it as “one of the most consequential shifts in policy for legal cannabis in decades,” underscoring the need for traceability.
Everett Smith of Presidential saw it as “a pivotal step,” committing to shape the future.
Jasmine Johnson of GŪD Essence stressed community aspects: “This change opens the door for real scientific research, fairer taxation, and more sustainable operations.”
Paula Savchenko of Cannacore Group and PS Law Group noted benefits for hemp: “Rescheduling marijuana to Schedule III is not just a cannabis policy shift, it is a pivotal moment for the hemp industry.”
Tyler Cartwright of Higher Standard called for unity: “Rescheduling is not the end of the conversation. It is the beginning of a necessary reckoning.”
Boris Jordan of Curaleaf thanked Trump for “the most impactful move taken around the cannabis plant since its prohibition 55 years ago.”
Sam Brill of Ascend Wellness Holdings praised the “commonsense, and data-driven step forward.”
Wendy Bronfein of Curio Wellness highlighted health outcomes: “This decision recognizes what patients, veterans, seniors, and families across the country already know: responsible cannabis policy can help reduce reliance on opioids.”
Andrew Berman of Arcana Collective cautioned balance: “This is not the finish line, but it is real progress.”
Kyle Sherman of Flowhub viewed it as ending barriers: “Now, businesses will finally have the opportunity to become profitable and reinvest capital into hiring and growth.”
Marc Beginin of Prodigy Processing Solutions anticipated research: “It removes barriers that have slowed investment and innovation.”
Alana Malone of Green Dot Labs noted state-federal alignment: “It begins to address long-standing barriers such as limited access to banking and significant tax burdens.”
Shawn Hauser of Vicente LLP summed up: “This is the beginning of a new era of public health policy,” urging comprehensive reforms.
What Now?
While celebratory, reactions underscore unfinished work. Rescheduling eases some hurdles but leaves gaps in criminal justice, full legalization, and equitable access. Industry advocates now eye Congress for broader changes, aiming for a regulated market that prioritizes safety, science, and inclusion.
