The Long‑Debated US Cannabis Rescheduling Moves Back Into Focus
On December 18, President Donald Trump signed an executive order directing the Department of Justice to fast‑track the removal of cannabis from Schedule I to Schedule III of the Controlled Substances Act. The move has reignited discussion among investors, policymakers and industry operators about what a federal reclassification could mean for taxation, banking, research and patient access.
While the order does not constitute full legalization, analysts note that shifting cannabis to Schedule III would align federal policy with the scientific consensus that the plant has accepted medical uses and a lower potential for abuse than substances currently listed in Schedules I or II. Below, experts from across the sector share their perspectives on the potential impacts.
Industry Experts Weigh In
Sasha Nutgent, Vice President of Cannabis Retail, Housing Works Cannabis emphasizes that the current Schedule I status creates a disincentive for legal operation, especially for businesses owned by individuals from communities disproportionately affected by the war on drugs. Reclassification, she argues, would remove that barrier and encourage broader participation in the legal market.
Anthony Coniglio, CEO of NewLake Capital Partners calls the executive order a “historic and long‑overdue alignment” of federal policy with medical practice and state‑level realities. He stresses that the next critical step is for the DOJ and DEA to issue the final rule swiftly, which would eliminate the punitive effects of Internal Revenue Code Section 280E. Removing 280E would allow state‑licensed operators to deduct ordinary business expenses, potentially boosting profitability for the nearly half‑million Americans employed in the industry.
Harrison Bard, CEO and Co‑founder, Custom Cones USA and DaySavers acknowledges that rescheduling could create additional competitive pressures for small operators but views it as a necessary step toward recognizing cannabis as legitimate medicine, particularly for veterans managing pain, PTSD and other service‑related conditions.
Chris Fontes, Founder and CEO, High Spirits offers a cautionary note, warning that Schedule III still imposes substantial regulatory hurdles. He points out that selling a Schedule III substance without FDA approval or proper licensure remains illegal under federal law, and that the industry must not conflate this move with full descheduling.
Implications for Banking Access
Access to banking services has long been a pain point for cannabis businesses operating under federal prohibition. Several experts weigh in on how rescheduling might influence this landscape.
Sierra Elaina, CEO, Lehua Brands describes the executive order as a potential turning point, noting that moving cannabis to Schedule III could finally grant the industry access to traditional banking, fair taxation and a clearer path to growth for operators that have been “hanging on by a thread.”
Terry Mendez, CEO, Safe Harbor Financial agrees that the order signals a shift in tone from Washington but cautions that rescheduling alone does not resolve the core compliance burdens tied to the Bank Secrecy Act. He argues that without structural reform—such as passage of the SAFER Banking Act—financial institutions may remain hesitant to serve cannabis‑related clients.
Ryan Hunter, Chief Revenue Officer, Spherex highlights the immediate tax relief that would flow from eliminating Section 280E. Under the current code, businesses handling Schedule I or II substances cannot deduct ordinary expenses, inflating effective tax rates to as high as 80 % for some operators. Rescheduling would curb that burden, potentially opening doors to broader investment opportunities.
Joe Gerrity, CEO, Crescent Canna adds that the change could also have ripple effects for hemp. With certain hemp‑derived THC products facing a possible federal ban later in the year, a coherent federal framework that distinguishes between marijuana and hemp would help avoid contradictory policies.
Mark Lewis, President of Specialty Payments, Lüt reminds readers that until the SAFE Banking Act or a similar fix is enacted, operators will still need to navigate “challenging financial hoops” to pay staff, settle bills and attract capital.
Adam Stettner, CEO, FundCanna echoes the tax‑relief argument, noting that eliminating 280E could be the difference between merely treading water and turning a profit for many licensed operators. He also points out that the move could unlock research pathways, encouraging more rigorous clinical studies and product innovation.
What It Means for Medical Cannabis
The medical community stands to gain significantly from a Schedule III designation, which would place cannabis alongside substances such as ketamine, Tylenol + Codeine and certain anabolic steroids—drugs that are FDA‑approved for prescription use.
Ryan Hunter observes that rescheduling would make it more practical for mainstream physicians to prescribe cannabis products, potentially expanding access in states that lack formal medical programs. He also notes that as recreational markets mature, medical‑focused offerings risk being overshadowed; a federal Schedule III status could help rebalance that dynamic.
Alex Gonzalez, President and Co‑founder, Calyx Containers argues that the shift signals a move toward pharma‑grade standards. Companies will need to tighten quality‑control systems, invest in scalable infrastructure and prepare for a regulatory‑ready supply chain to remain competitive.
Mark Lewis highlights the research opportunities that could arise, suggesting that increased access to federal funding and streamlined approval processes may accelerate the development of cannabis‑based medicines.
Ali Garawi, Co‑founder, CEO and CFO, Muha Meds contends that while full descheduling remains the ideal outcome, rescheduling is an important step forward. It would create space for sensible regulation, improved banking access, expanded medical research and stronger consumer protections—elements that have long been missing from the federal framework.
Josh Kesselman, Publisher, High Times Magazine raises a note of caution, warning that moving THC to Schedule III could enable pharmaceutical companies to market synthetic THC prescriptions at high prices while exposing existing dispensaries to new felony risks under the Food, Drug, and Cosmetic Act.
Gennaro Luce, Founder and CEO, CannaLnx believes that rescheduling could improve patient access to insurance coverage, but notes that insurers still need verification and eligibility frameworks in place before they can treat medical cannabis as a standard benefit.
Gibran Washington, CEO, Ethos views the executive order as a long‑overdue acknowledgment of cannabis’s therapeutic value. He believes it can serve as a catalyst for broader reforms addressing affordability, equity and the lingering stigma that still surrounds the plant.
JP Doran, CEO, Crucial Innovations adds that the decision could have international repercussions, encouraging regulators in the UK, EU, South Africa and other markets to revisit outdated frameworks and align with emerging scientific evidence.
Betty Aldworth, Co‑Executive Director, MAPS; Chair, Marijuana Policy Project reminds readers that symbolic moves are not enough. Without accompanying reforms that address criminal sanctions, collateral consequences and financial barriers, the communities most harmed by prohibition may continue to face disproportionate challenges.
Overall, the executive order has sparked a mix of optimism and caution across the cannabis sector. While many see the removal of Section 280E and the recognition of medical utility as tangible benefits, experts agree that lasting change will require additional legislative action—particularly the SAFER Banking Act and measures that protect both marijuana and hemp markets—before the industry can operate on par with other legitimate businesses.
For a deeper dive into the analysts’ reactions and the full context of the executive order, see the original coverage Here.
