Cannabis Community, Investors React to DEA Decision To Reschedule

DEA Reschedules Cannabis: What It Means for the Industry, Investors, and Legalization Efforts

Cannabis advocates, business leaders, and investors are celebrating a groundbreaking decision by the U.S. Drug Enforcement Administration (DEA) to reschedule marijuana under federal drug laws. This pivotal move marks a significant shift in cannabis policy, sparking excitement worldwide and driving cannabis stock prices higher. However, while this decision represents progress, it falls short of the full legalization of marijuana that advocates have fought for over decades.

DEA’s Decision: Rescheduling Cannabis Under Federal Law

According to an Associated Press report, the DEA has decided to follow the U.S. Department of Health and Human Services (HHS) recommendation to reclassify marijuana under the Controlled Substances Act (CSA). Sources familiar with the matter indicate that cannabis will move from Schedule I—a classification reserved for substances with no accepted medical use and a high potential for abuse—to Schedule III, placing it in the same category as Tylenol with codeine and testosterone.

This landmark shift could boost cannabis research, opening doors to medical studies that were previously restricted under stringent federal regulations. As a Schedule I drug, cannabis has faced severe limitations on scientific research, preventing the exploration of its potential medical benefits for pain management, mental health conditions, and other ailments.

Impact on the Cannabis Industry: Banking, Taxes & Business Growth

The DEA’s cannabis reclassification will bring substantial changes to the legal marijuana industry. One of the most notable benefits is that cannabis businesses will gain access to banking services that were previously unavailable due to federal restrictions. Additionally, the reclassification will exempt cannabis companies from IRS Rule 280E, which currently prevents businesses dealing with Schedule I substances from deducting standard business expenses.

Chuck Smith, Chairman of the Colorado Leads coalition, emphasized that reclassification will ease tax burdens on cannabis businesses, allowing them to reinvest in growth, hire more employees, and support their local economies.

Muha Meds CEO Ali Gharawi highlighted how the decision will free up capital for companies that have struggled with financial limitations under current tax laws. “As a self-funded cannabis business, we’ve had to think outside the box. With this shift, we can access more funding and drive significant growth in the legal cannabis market,” Gharawi stated.

Bob Groesbeck, co-CEO of Planet 13, a major cannabis dispensary operator, pointed out that the DEA’s decision could accelerate the push for federal banking reforms. “Secure banking in the cannabis industry is crucial for financial stability, transparency, and consumer convenience,” he said.

Activists Push for Full Cannabis Legalization

While the DEA’s cannabis reclassification represents progress, it does not achieve federal marijuana legalization, leaving a significant gap between state and federal policies. Paul Armentano, Deputy Director of the National Organization for the Reform of Marijuana Laws (NORML), argues that marijuana should not be regulated under the Controlled Substances Act (CSA) at all.

“Placing cannabis in Schedule III does not resolve the conflict between state legalization laws and federal restrictions,” Armentano stated. Advocates are calling for broader federal marijuana reforms, including full de-scheduling and expungement of past cannabis-related convictions.

Sarah Gersten, Executive Director of the Last Prisoner Project, emphasized the need for continued efforts to correct past injustices in cannabis-related criminal cases. “While this is a step forward, full legalization and criminal justice reform must follow,” she asserted.

Cannabis Stocks Surge After DEA Announcement

Despite the lack of full legalization, the DEA’s marijuana reclassification triggered a major rally in cannabis stocks. On Tuesday, shares of leading multi-state operators soared:

• Trulieve Cannabis Corp. surged nearly 30%
• Curaleaf Holdings climbed 19% to a 52-week high
• TerrAscend Inc. rose 25%
• Green Thumb Industries Inc. gained 22%
• Cresco Labs Inc. increased by 14%

Emily Paxia, Co-founder of Poseidon Investment Management, predicted that this move will attract more institutional investors into the legal cannabis industry, increasing market liquidity and expanding business opportunities.

What’s Next for the Cannabis Industry?

The DEA’s marijuana rescheduling is a historic moment in U.S. cannabis policy reform, but full legalization remains the ultimate goal for advocates. The cannabis industry, investors, and policymakers will continue pushing for comprehensive legislative changes that ensure fair taxation, banking access, and social justice reforms.

As momentum builds, the future of the legal cannabis market looks brighter than ever. Stay updated on the latest cannabis industry news and stock market trends as this evolving landscape unfolds.