Industry eyes White House as cannabis rescheduling with a mixture of hope and wariness
The marijuana industry eyes White House around cannabis rescheduling as it continues in a years long holding pattern, Wall Street analysts are weighing in on whether the White House will finally make a decisive move. According to investment bank TD Cowan, there’s now a 60% probability the President will issue an order requiring the DEA to reschedule cannabis, likely moving it from Schedule I to Schedule III under the Controlled Substances Act.
That shift could have major implications—opening the door for reduced tax burdens on cannabis companies and signaling a broader federal softening on marijuana policy. But while the outlook is optimistic, analysts caution that history suggests a degree of skepticism is still warranted.
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TD Cowan notes  while the President has recently expressed support for rescheduling or even legalizing cannabis, his track record tells another story. During his first term, he made similar statements but took no substantive action. In fact, many of his nominees to key federal positions were openly opposed to cannabis reform or leaned toward skepticism.
The cautionary tone comes from a “long history of false optimism” around the President and cannabis policy. Industry veterans recall several moments when business leaders left White House meetings confident reform was coming—only for nothing to materialize. “This is not unique to the President,” TD Cowan adds, drawing parallels to Senate Minority Leader Chuck Schumer’s stalled 2022 effort to secure cannabis banking reforms, which many believed was within reach but ultimately fizzled.
Even so, the political calculus could favor action. Rescheduling cannabis could give the President a quick, headline-grabbing win that resonates across party lines. It might also shift media coverage away from less favorable topics, including ongoing trade disputes, tariff policies, and the revived scrutiny over the Epstein controversy.
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From a market perspective, moving cannabis to Schedule III would be more than symbolic. It would end the IRS’s application of 280E tax rules to cannabis businesses, potentially freeing up millions in annual cash flow for operators. For investors, that kind of regulatory shift could spark renewed interest in a sector battered by oversupply, limited access to banking, and patchwork state-level rules.
Still, as TD Cowan warns, “optimism must be tempered.” With campaign season heating up, policy promises can be as much about political theater as legislative reality. The cannabis industry, long accustomed to slow federal movement, will be watching closely—hoping that this time, talk turns into action.
