Trump Considers Shift in Federal Cannabis Rescheduling

LOS ANGELES – President Donald Trump is exploring a move to reclassify Cannabis from Schedule I to Schedule III under federal law, according to a report from The Wall Street Journal. The potential policy shift, discussed at a fundraiser earlier this month at his Bedminster, New Jersey, golf club, could reshape regulations for the multibillion-dollar Cannabis industry without full legalization.

At the event, Trump spoke with attendees, including Trulieve Cannabis Corp. CEO Kim Rivers, about reviewing the classification. White House officials have gathered agency input, with a report now under review by Chief of Staff Susie Wiles. The conversation comes as Cannabis companies have directed significant funds to Trump-aligned political groups in recent months.

Reclassifying Cannabis to Schedule III would acknowledge its potential medical uses while maintaining regulatory controls. The idea builds on a 2022 review initiated by President Joe Biden, which led to a 2023 Health and Human Services recommendation for the change. The Drug Enforcement Administration has yet to finalize that proposal, leaving its fate uncertain as Trump took office.

For the Cannabis industry, the financial implications are substantial. Schedule I status triggers IRS Section 280E, which bars deductions for standard business expenses, leading to effective tax rates often exceeding 70%. Moving to Schedule III would lift this restriction, allowing deductions for costs like rent and payroll, potentially boosting profitability. Banking access could also expand, as federal risks have long deterred financial institutions from serving the sector.

Politically, the move marks a shift from Trump’s first-term skepticism, when he raised concerns about the impact of Cannabis on IQ and resisted reform. Recent remarks emphasize states’ rights and ending arrests for personal use, aligning with polls showing roughly 70% of Republicans support rescheduling. Advocates argue it would accelerate U.S. medical research, where foreign competitors have gained ground due to domestic restrictions. However, some law enforcement groups worry it could limit probable cause for searches based on Cannabis odor, conflicting with Trump’s tough-on-crime stance.

Congressional pushback adds uncertainty. In July, a House subcommittee advanced a bill to block Justice Department funds for rescheduling efforts, reflecting resistance from some conservatives. Trump’s new DEA administrator, Terrance Cole, did not mention the issue in his initial priorities, though industry leaders continue to press for action.