Cannabis Update: Federal Rescheduling Buzz Shakes Markets and Industry Expectations

December 12, 2025 | Cannabis Policy & Market Watch

This morning brought a flurry of headlines that eclipsed the usual trade chatter: the federal cannabis classification could be on the brink of its biggest shift in decades. Multiple major outlets reported that President Donald Trump is expected to move forward with plans to reclassify marijuana from a Schedule I drug to Schedule III under the Controlled Substances Act — though no final decision has been issued yet.

What’s Happening

According to widespread reporting, the White House is preparing to direct federal agencies to ease the current Schedule I restrictions that have kept cannabis in the same bucket as heroin and LSD. A transition to Schedule III would align marijuana with substances that are viewed as having accepted medical use and a lower abuse potential, similar to certain prescription painkillers.

Officials in the administration have discussed issuing either an executive order or administrative push to restart a rescheduling process that stalled under the prior DEA rulemaking. Key policy advisers and industry executives were reportedly involved in conversation around the plan, but no date or official action has yet been announced.

Market Reaction

The headlines alone moved markets. Cannabis stocks reacted strongly in early trading:

• Major multi-state operators saw double-digit gains, with names like Tilray Brands, Canopy Growth and Cronos Group jumping sharply on rescheduling optimism.
• Sector-specific ETFs also experienced notable upticks as investors priced in potential policy relief.

This market response reflects long-standing investor belief that even incremental federal reform could meaningfully reduce regulatory friction and improve capital access for cannabis businesses.

What It Could Mean for the Industry

If cannabis were officially classified as Schedule III, the implications would be real — even though such a move wouldn’t legalize cannabis nationwide:

1. Federal Tax Relief
Businesses could finally escape the punitive effects of IRS Section 280E. Under Schedule I status, normal business deductions like rent and payroll are disallowed. Schedule III classification could unlock those deductions and enhance net cash flow for operators.

2. Research Expansion
A Schedule III designation acknowledges “accepted medical use,” which could ease barriers for medical research and FDA-approved cannabinoid products.

3. Banking and Capital Access
Although moving to Schedule III doesn’t itself solve all banking barriers, it could encourage more financial institutions to engage with licensed cannabis companies without the overhang of Schedule I federal illegality. Opening up additional lenders to finance cannabis real estate, procure cannabis equipment loans and fund general cannabis business loans.

4. Regulatory and Enforcement Impact
Rescheduling doesn’t mean recreational legalization or permit federal interstate commerce — those changes would still require legislation. But it could tilt public and political will toward future reform.

What’s Still Uncertain

Every outlet reporting on this story underscores the same nuance: nothing is final yet. The White House emphasized that a decision has not been formalized, and administrative processes through HHS, DOJ and the DEA remain part of the pathway forward.

Historically, cannabis policy shifts take time and can stall, even when executive interest is high. The industry has seen this before. What’s different now is the alignment of political attention and years of federal review that preceded these developments.

Bottom Line for Cannabis Businesses

Today’s headlines are a significant signal — not a conclusion. The market reaction reflects optimism that federal regulators might finally begin to unwind decades of Schedule I constraints. If those changes move forward, the benefits could help improve profitability and operational flexibility for licensed operators.

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Stay tuned for firm updates as these discussions evolve.

Sources

• Washington Post reporting on Trump’s rescheduling plan
• Barron’s: Cannabis stocks surge on rescheduling rumors
• Cannabis Business Times on federal rescheduling considerations
• Reuters: Market reaction to rescheduling reports
• FastCompany: Stock pricing reaction to rescheduling rumor
• Bloomberg: Trump plan lifts pot stocks
• Proactive Investors: Cannabis stocks rise on rescheduling talk
• Canna Law Blog explainer on marijuana rescheduling and implications
• Wikipedia summary of cannabis federal scheduling history

About the Author: Daryl Eames is the founder of Loanviser and the NH Cannabis Association. He has advocated for cannabis legalization in the state of New Hampshire and has deep experience in cannabis financing and cannabis merchant processing, servicing the cannabis industry since 2019.