President Trump’s recent executive order to reschedule marijuana has the cannabis world buzzing with hope and confusion. Will it slash taxes for businesses overnight? Industry insiders are thrilled but warn that big changes won’t happen fast. Stick around as we dive into the key questions shaking up this historic move.
Trump’s order, signed just weeks ago in late 2025, aims to move marijuana from Schedule I to Schedule III under federal law. This shift recognizes some medical value and lower abuse risk, unlike its current spot next to heroin.
This change could end the brutal 280E tax rule that blocks cannabis firms from deducting normal business costs. Right now, these companies pay taxes on gross income, leading to rates as high as 70%. Moving to Schedule III would let them claim expenses like rent and payroll, dropping effective taxes to around 20-30%.
But hold on, it’s not full legalization. Marijuana stays illegal at the federal level, so state markets still clash with Uncle Sam. Experts say this opens doors for research and banking, yet transport across state lines remains banned.
One big win? More studies on medical uses, which could boost treatments for pain and seizures.
Is 280E Tax Relief Coming Right Away?
The short answer is no, relief isn’t instant. The executive order starts a process that needs DEA approval and could take months.
Recent reports show the order prioritizes quick action, but red tape means changes might not hit until mid-2026. For taxes, if rescheduling sticks, businesses could see benefits on their next federal returns.
Let’s break down the timeline:
- Executive order issued: December 18, 2025.
- DEA review: Expected to wrap up in 90-180 days.
- Effective date: Likely after final rules publish in the Federal Register.
Industry groups cheer this as a game-changer, but warn small operators might struggle with new regs. One accountant noted that states mirroring federal taxes would follow suit, easing burdens in places like California and Colorado.
Still, questions linger. Is relief retroactive? Most experts say no, applying only to future tax years. That leaves 2025 filings stuck under old rules.
A quick look at potential savings shows multi-state operators could pocket millions. For example, a firm with $10 million in revenue might save $4 million in taxes post-change.
Key Industry Worries and Reactions
Excitement is high, but so are concerns. Business leaders applaud the move as a first step, yet fear stricter federal oversight.
Many worry rescheduling won’t fix banking woes, as pot remains federally illegal. Banks hesitate to serve the industry, forcing cash-only ops that invite crime.
Advocates push for more, like freeing cannabis prisoners. One lawyer shared that this “unrings the bell” on prohibition, but full reform needs Congress.
Politicians and execs react positively overall. A recent poll by a cannabis trade group found 80% of stakeholders see it as progress, though 60% want faster action.
On the flip side, some states decoupled from 280E already, offering local relief. But for most, this federal shift is huge.
Here’s what stays tricky:
- Interstate commerce: Still off-limits.
- Advertising: Federal rules might tighten.
- Medical access: Easier research, but not nationwide sales.
Operators in states like New York report mixed feelings. One dispensary owner said, “Tax breaks are great, but we need real legalization to grow.”
What Doesn’t Change and What’s Next
Rescheduling tweaks the edges, but core issues persist. Marijuana won’t flood streets legally, and federal raids could continue in theory.
Transport over state lines? Still a no-go, keeping supply chains messy. Plus, it’s not descheduling, so it stays a controlled substance.
Looking ahead, this could spark bigger reforms. Analysts predict stock boosts for cannabis firms, with shares jumping 20% after the order.
Trump’s team hints at more executive moves, but Congress holds the keys to full change. Industry watchers eye 2026 for key votes.
In a surprising twist, this aligns with growing public support. A 2025 Gallup poll showed 70% of Americans back legalization, up from 50% a decade ago.
As we enter 2026, the cannabis sector braces for evolution. Will this lead to booming businesses or more hurdles?
This marijuana rescheduling marks a pivotal turn, promising tax relief and research gains while leaving federal bans intact. It stirs hope for entrepreneurs battered by high taxes and sparks debate on deeper reforms.