The cannabis industry can expect significant changes in 2025 with the new administration, bringing a mix of potential opportunities and challenges. During his presidential campaign, Trump expressed support for states’ rights in deciding the issue of legalization. He indicated that states with legalized cannabis—whether recreational or medical—would not face federal intervention. However, he has historically not advocated for nationwide legalization. Since cannabis reform is not specifically addressed in Project 2025, it may not be a high-priority initiative.
On May 21, 2024, under the Biden Administration, the Department of Justice published a Notice of Proposed Rulemaking (NPRM) to transfer marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III. This step aligns with the Department of Health and Human Services’ (HHS) position that marijuana has a currently accepted medical use, a lower potential for abuse than Schedule I and II substances, and that its abuse may lead to moderate or low physical dependence or high psychological dependence.
Reclassifying cannabis to Schedule III could expand access to banking, insurance, and other services for cannabis businesses. It may also ease the financial burden of IRS Code Section 280E, which prohibits cannabis companies from taking standard business deductions due to marijuana’s current Schedule I status. Businesses could see reduced tax burdens and more opportunities to reinvest in growth and innovation.
Trump has also shown support for the SAFE Banking Act, which would provide cannabis businesses with much-needed access to financial services. This could reduce the risks associated with cash-only operations and pave the way for more affordable lending options.
State-Level Reforms on the Rise
Support for states’ rights to pass marijuana laws could lead to broader adoption of legalization measures. Currently, 24 states, two territories, and the District of Columbia have legalized small amounts of cannabis for adult recreational use, according to the National Conference of State Legislatures (NCSL), while medical cannabis is legal in 40 states. Most recently, Delaware, Maryland, Minnesota, Missouri, Ohio, and Rhode Island passed legislation allowing individuals aged 21 or older to possess certain amounts of cannabis.
A consistent federal stance on respecting state-level decisions could encourage more states to legalize, helping create more uniform policies across the country. Additionally, federal reforms could open the door to interstate commerce, allowing businesses to expand their reach and operate more efficiently.
Challenges to Watch
Despite these potential opportunities, challenges remain. The appointment of key officials, such as the Attorney General and DEA leadership, could have a major impact on the pace and direction of cannabis reforms. Trump’s potential nomination of Pam Bondi for Attorney General raises concerns, as she has historically opposed cannabis legalization during her time as Florida’s Attorney General.
The fragmented regulatory landscape among states is another challenge. States like California have mature regulatory systems, while others are still ironing out inconsistencies. Aligning state and federal policies will be crucial for building a cohesive and sustainable national cannabis market.
Looking Ahead to 2025
While the cannabis industry has reasons for optimism, it must remain prepared for potential challenges. Federal reclassification, financial reforms, and state-level expansions could unlock significant growth, but success will depend on the administration’s priorities and how quickly these changes are implemented.
Businesses should stay informed about legislative developments, such as the final rulemaking process for reclassification and updates to the SAFE Banking Act. Advocacy efforts will also play a key role in shaping policies that support the industry’s growth and sustainability.
In summary, 2025 could bring transformative changes to the cannabis industry. By staying adaptable and proactive, businesses can navigate the evolving landscape and position themselves for long-term success.
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