Cannabis industry experts are warning that the benefits from the proposed federal rescheduling of the drug could still be years away – and the move may also bring complications for the industry.
Last week the Trump administration issued an executive order backing the long-discussed move to change cannabis from a Schedule I controlled substance to Schedule III.
The order has been widely welcomed by Connecticut’s cannabis growers and retailers, because when the change is implemented it could alter their tax status to allow them to deduct business expenses from their federal returns.
“It’s going to help us drastically from a financial standpoint,” said Carl Tirella Jr., founder of Budr. “We will see about 12 to 14% straight to the bottom line, which will allow us to reinvest into the business.”
Tirella says Budr would expect to use any additional cash to grow the business, including via acquisitions. He also believes the federal change moves the drug into the mainstream, which may attract new consumers, investors and professional service providers for cannabis businesses.
However, he cautions rescheduling is still some way off.
“The reality of the situation is there’s still a lot of hurdles that need to go through,” he said.
Attorney Jason Klimek of Harris Beach Murtha agrees, noting that rescheduling would still have to go through a hearing before an administrative law judge, who will make a recommendation to the Drug Enforcement Agency. Once the DEA has made a decision, he expects immediate lawsuits from groups that oppose the change.
“There’s procedures that have to be followed, and because this is controversial there will be a lot of people who will be looking at every single aspect of it,” he said. “An executive order doesn’t override statute and regulation.”
Independent cannabis tax attorney James Mann said he doesn’t expect rescheduling to happen in 2026, and potentially not even in 2027. He also says it’s also not entirely clear whether the rescheduling would even apply to recreational cannabis, or just to cannabis that’s produced for medical patients.
Rescheduling would bring cannabis under the jurisdiction of the Food and Drug Administration for the first time, meaning medical cannabis companies may have to comply with a raft of additional regulations, and potentially put their products through costly human clinical trials.
“Schedule III substances must be dispensed by DEA-registered pharmacies like CVS and require an FDA-approved prescription,” said medical cannabis advocate Louis Rinaldi. “State medical marijuana dispensaries are not pharmacies, and current medical cannabis products are not FDA-approved.”
He says rescheduling without identifying a robust funding stream to implement therapeutic research is just “bureaucratic theater.”
“Schedule III leaves the entire existing state medical system in the same legal gray area it is in now,” he said.
