The Future of Cannabis: What Happens After Rescheduling?

On December 18, 2025, the U.S. President signed an executive order to expedite the rescheduling of cannabis from a Schedule I substance to a Schedule III.

So, what happens now?

Immediately...?

Nothing.

The Executive Order was essentially a nudge to the Department of Justice (DOJ) and the Drug Enforcement Agency (DEA) to finish their proposal for the new rules and laws surrounding cannabis in our country. This excited many when it was first presented in 2024.

Until those are finalized (and approved), it all remains a waiting game filled with endless speculation.

Let’s Speculate!

I think most would agree that a couple of known areas of impact will be in relation to taxation and research.

Taxes

The change in status means businesses would no longer be subject to the dreaded 280E Tax code. This code currently prohibits the deduction of most normal operational expenses and results in higher rates (50%-70% or more).

Once unshackled from this code, and the ability to deduct basic expenses is granted, the industry will save billions. Yes, with a "B".

I personally won’t be holding my breath for a raise, but it’s fair to say there will be an increase in opportunity.

Research

The Schedule I classification made federal research almost impossible. However, with the shift to Schedule III, regulatory walls weaken, and cannabis is revalidated as a medical option.

This means universities, pharma companies, and federally backed researchers can now conduct clinical trials to further evolve our knowledge of the plant.

With time, this will expand the medical market further than ever before. We can expect new and diversified cannabinoid therapy options, beyond just CBD and THC. In the process, cannabis will be re-legitimized as a medicine after decades of stigma and miseducation.

Other Potential Impacts

A few other potential impacts that come to mind include consumption, crime, and banking.

Consumption

Honestly, I don't see this being a popular topic of discussion. But for the everyday consumer out there who still struggles to find a safe sesh spot, just know that nothing changes.

Cannabis remains illegal. There will be no overnight lounges or green-friendly smoking areas. Keep your secret rituals and consume at your own risk!

Crime

Once officially reclassified, the penalties for relative non-violent crimes become less severe, which can be seen as a win. However, the discussion surrounding this topic has always mainly focused on those already incarcerated.

It's no secret that many still serve lengthy sentences for non-violent cannabis crimes due to a flawed system. Even modern-day elected officials have expressed their feelings about the matter, as we've seen a rise in mass pardons over the last few years. Regardless, rescheduling is not likely to have a full-scale effect on the situation, and pardons and expungements will remain a battle.

However, this will provide power to those still fighting for freedom and hopefully pave the way for continued change.

Banking

This has been an adjacent issue since the first days of modern-day dispensaries.

Most banks have shied away from working with cannabis businesses for fear of federal penalties. It’s likely that it will take more than rescheduling for banks to open their doors to this herbal industry.

But hopefully, this will loosen the locks in the meantime, making loans more accessible to those in the cannabis space.

The Road Ahead

As the list could go on and on, I’ll choose to end here until more is known, or I just feel like revisiting.

If you have any insight or comments, please share and pay it forward.

Let’s keep this conversation going!

-Happy Huffs

Note: If you're interested in exploring more about cannabis and its evolving landscape, check out MOFFTT.