My Take on What Marijuana Rescheduling Could Mean for the Industry

As many of us are now aware, an executive order was signed in December to initiate the process of rescheduling marijuana to Schedule III. I intentionally waited before sharing my thoughts to let the initial reaction settle. There was a lot of noise online about what this announcement meant—and what the future of the industry might look like.

One thing is clear: rescheduling will not happen overnight. This will be a drawn-out process, and it will take time before any official changes are implemented. That said, here are a few potential pros and cons if rescheduling is ultimately carried through.

Pro: Scientific Research & Medical Use

One of the biggest wins of rescheduling would be the ability to conduct more robust scientific research on cannabis. The industry still lacks widespread education for consumers and sufficient research to fully demonstrate the plant’s benefits.

We already see FDA-approved medications derived from cannabinoids that treat seizure disorders and support cancer and HIV/AIDS patients. Increased access to funding and research opportunities could lead to more rigorous testing, clearer standards, and broader medical applications.

Rescheduling could also make medical marijuana more accessible to patients—and potentially open the door for insurance coverage. Overall, this would be a major step forward for researchers and medical professionals alike.

Con: Market Consolidation

A significant risk of rescheduling is increased market consolidation. As cannabis becomes more federally accepted, pharmaceutical companies will likely begin buying into the space.

If IRS Code 280E is eliminated, larger players will have substantially more capital to invest, which could push smaller “mom-and-pop” shops out of the market. This leads directly into my next point: tax relief.

Pro: Tax Relief for Businesses

One of the most common challenges we hear from both prospective and current clients is financing. Many labs want to expand but simply don’t have the financial flexibility to reinvest in growth.

If rescheduling leads to the elimination of 280E, this could be a major turning point. Being able to deduct normal operating expenses would provide meaningful tax relief, allowing businesses to redirect capital toward hiring, training, compliance, safety, and facility upgrades.

That said, while this relief would benefit small businesses, it could also serve as the tipping point for big pharma to buy in—potentially shrinking the space for independent operators and, in turn, our broader client base.

Con: Uncertainty

Rescheduling introduces a lot of unknowns. As a small business owner who has watched this industry evolve, the possibility of large pharmaceutical companies consolidating the market is overwhelming. It raises real concerns about whether the progress made in accessibility—for patients and consumers —could be undone.

The only scenario where small cannabis companies may remain competitive is if the FDA creates a pathway for them to fast-track into the medical side of marijuana (which, realistically, seems unlikely).

With so many unanswered questions, I’m choosing not to focus on the “what ifs,” but instead on how this legislation is ultimately written—and how it’s enforced. That will determine the path this rescheduling truly carves out for the industry.

I’d like to hear your thoughts. Now that a few weeks have passed since the announcement, how do you feel about the potential rescheduling? Let me know in the comments below.