It is now nearly two months since President Donald Trump surprised the global cannabis industry by signing an executive order to drag the highly-anticipated cannabis rescheduling process out of the bureaucratic swamp.
With no mention of the project from the administration ever since, the void is once again being filled with prohibitionist pushback, market scepticism, and relentless distractions.
As the initial euphoria of the Executive Order to expedite cannabis rescheduling now all but evaporated, cannabis stocks have predictably surrendered their rapid gains.
The AdvisorShares Pure US Cannabis ETF (MSOS), which surged 24% following the December announcement, is now down 15% year-to-date as the broader S&P 500 climbs into positive territory.
While the project is by no means written off, the cannabis industry at large historically has poor form on succumbing to hype, and an increasing number of leading voices are now suggesting it could have fallen into this trap once again.
“Rescheduling is just going to be a big tax break largely the MSOs, and it’s going to help their bottom line, which might help their stock price,” Arthur Cordova, CEO of cannabis company Ziel and former Wall Street institutional trader. “But outside of that, it will do nothing to inject any additional capital in the traditional sense.”
With the Justice Department offering no updates on implementation progress and the administrative pathway remaining unclear, Cordova says he’s still waiting for credible analysis of how the process moves forward: “I have yet to read an incisive article that explains how rescheduling gets done now.”
That uncertainty compounds mounting political resistance from within Trump’s own party. The path to Schedule III faces significant legal and administrative hurdles, and even if successful, may not deliver the transformational change legacy operators anticipated.
Trump’s executive order directed Attorney General Pam Bondi to ‘take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious manner.’
But two months later, the Justice Department has provided virtually no clarity on how, when, or whether that will occur.
When pressed by Marijuana Moment last month, a DOJ spokesperson said the department had no ‘comment or updates’ to share. More recently, an agency official told Salon that the ‘DOJ is working to identify the most expeditious means of executing the EO’, suggesting that the path forward has not yet been established.
“You sign one of these executive orders,” Cordova continued, asking if Trump can simply ‘call his DEA person and just do it…don’t give me any guff about it…I want it done by Monday?’
“All the people who are against rescheduling will then take them to court, and they’ll have a field day because it was rushed. So will it stand? Did they have public hearings for the other side?”
The administrative requirements are substantial. The Drug Enforcement Administration must still review 43,000 public comments submitted during the Biden administration’s Notice of Proposed Rulemaking process. The agency has had no administrative law judges on staff since August 2025, the very officials responsible for overseeing drug reclassifications. DEA Administrator Terry Cole, who was confirmed in July, has yet to commit publicly to rescheduling and controls the appointment of new judges who could restart the process.
A recent Congressional Research Service report outlined how the DOJ could, in theory, reject the president’s directive entirely or delay the process by restarting the scientific review.
Attorney General Bondi has so far remained silent on the issue. While it had been speculated the issue would be brought up in this week’s explosive hearing, the session was inevitably derailed by the Epstein Files scandal. .
Legal challenges are also virtually guaranteed. Nebraska Attorney General Mike Hilgers led a multistate opposition letter during the Biden process and has continued litigation against medical cannabis programs and hemp-derived intoxicants.
Anti-cannabis groups have already prepared challenges to the rescheduling science. Even pro-reform advocates may sue, arguing that rescheduling doesn’t go far enough and that cannabis should be de-scheduled and entirely removed from the Controlled Substances Act.
The central focus for US-based cannabis operators regarding rescheduling has been the removal of the 280e tax rule, the IRS code section that bars ordinary business deductions for Schedule I/II drug operations.
But suggestions it could open the door to institutional capital, Cordova suggests, are overcooked.
“Could it make those stocks more attractive who are publicly traded on, say, a Canadian exchange, and thereby elevating the stock price and the market capitalisation of which they could then maybe get loans from non-conventional means, raise more equity in that way? Yeah, but that’s an around the bend way.”
The real barrier isn’t Schedule I classification, it’s banking reform, which remains stalled despite widespread state legalisation. Without access to traditional banking and capital markets, rescheduling offers limited relief.
“Banking reform,” Cordova says, would require the “one two punch” of rescheduling combined with legislative action. “Even Chuck Schumer…when they had control of the Senate, would not bring it to a floor vote.”
Furthermore, most of the MSOs are already operating as if 280e has already been abolished, meaning immediately gains will likely be modest.
The one area where Cordova sees genuine progress is research access, but the real-world benefits for patients and businesses will likely not be felt for years.
“It should allow people to work in the clear rather than just the three or four government research centres,” he explained.
Big Pharma companies that have been ‘quietly working behind the scenes’ will finally be able to discuss cannabis in their pipeline publicly. Multinationals like Bayer and Novartis, previously cautious about jeopardising US operations, can now engage openly.
Clinical trials, FDA approvals, and pharmaceutical development timelines don’t move quickly, and legacy cannabis operators lack the regulatory infrastructure that Big Pharma has spent decades building.
Business of Cannabis will be publishing a series of articles diving into the detail of the realities of rescheduling in the coming weeks.
The post Rescheduling Optimism Fades, Cannabis Stocks Follow appeared first on Business of Cannabis.
Continue reading...
With no mention of the project from the administration ever since, the void is once again being filled with prohibitionist pushback, market scepticism, and relentless distractions.
As the initial euphoria of the Executive Order to expedite cannabis rescheduling now all but evaporated, cannabis stocks have predictably surrendered their rapid gains.
The AdvisorShares Pure US Cannabis ETF (MSOS), which surged 24% following the December announcement, is now down 15% year-to-date as the broader S&P 500 climbs into positive territory.
While the project is by no means written off, the cannabis industry at large historically has poor form on succumbing to hype, and an increasing number of leading voices are now suggesting it could have fallen into this trap once again.
“Rescheduling is just going to be a big tax break largely the MSOs, and it’s going to help their bottom line, which might help their stock price,” Arthur Cordova, CEO of cannabis company Ziel and former Wall Street institutional trader. “But outside of that, it will do nothing to inject any additional capital in the traditional sense.”
With the Justice Department offering no updates on implementation progress and the administrative pathway remaining unclear, Cordova says he’s still waiting for credible analysis of how the process moves forward: “I have yet to read an incisive article that explains how rescheduling gets done now.”
That uncertainty compounds mounting political resistance from within Trump’s own party. The path to Schedule III faces significant legal and administrative hurdles, and even if successful, may not deliver the transformational change legacy operators anticipated.
The implementation problem
Trump’s executive order directed Attorney General Pam Bondi to ‘take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious manner.’
But two months later, the Justice Department has provided virtually no clarity on how, when, or whether that will occur.
When pressed by Marijuana Moment last month, a DOJ spokesperson said the department had no ‘comment or updates’ to share. More recently, an agency official told Salon that the ‘DOJ is working to identify the most expeditious means of executing the EO’, suggesting that the path forward has not yet been established.
“You sign one of these executive orders,” Cordova continued, asking if Trump can simply ‘call his DEA person and just do it…don’t give me any guff about it…I want it done by Monday?’
“All the people who are against rescheduling will then take them to court, and they’ll have a field day because it was rushed. So will it stand? Did they have public hearings for the other side?”
The administrative requirements are substantial. The Drug Enforcement Administration must still review 43,000 public comments submitted during the Biden administration’s Notice of Proposed Rulemaking process. The agency has had no administrative law judges on staff since August 2025, the very officials responsible for overseeing drug reclassifications. DEA Administrator Terry Cole, who was confirmed in July, has yet to commit publicly to rescheduling and controls the appointment of new judges who could restart the process.
A recent Congressional Research Service report outlined how the DOJ could, in theory, reject the president’s directive entirely or delay the process by restarting the scientific review.
Attorney General Bondi has so far remained silent on the issue. While it had been speculated the issue would be brought up in this week’s explosive hearing, the session was inevitably derailed by the Epstein Files scandal. .
Legal challenges are also virtually guaranteed. Nebraska Attorney General Mike Hilgers led a multistate opposition letter during the Biden process and has continued litigation against medical cannabis programs and hemp-derived intoxicants.
Anti-cannabis groups have already prepared challenges to the rescheduling science. Even pro-reform advocates may sue, arguing that rescheduling doesn’t go far enough and that cannabis should be de-scheduled and entirely removed from the Controlled Substances Act.
What will really change?
The central focus for US-based cannabis operators regarding rescheduling has been the removal of the 280e tax rule, the IRS code section that bars ordinary business deductions for Schedule I/II drug operations.
But suggestions it could open the door to institutional capital, Cordova suggests, are overcooked.
“Could it make those stocks more attractive who are publicly traded on, say, a Canadian exchange, and thereby elevating the stock price and the market capitalisation of which they could then maybe get loans from non-conventional means, raise more equity in that way? Yeah, but that’s an around the bend way.”
The real barrier isn’t Schedule I classification, it’s banking reform, which remains stalled despite widespread state legalisation. Without access to traditional banking and capital markets, rescheduling offers limited relief.
“Banking reform,” Cordova says, would require the “one two punch” of rescheduling combined with legislative action. “Even Chuck Schumer…when they had control of the Senate, would not bring it to a floor vote.”
Furthermore, most of the MSOs are already operating as if 280e has already been abolished, meaning immediately gains will likely be modest.
The one area where Cordova sees genuine progress is research access, but the real-world benefits for patients and businesses will likely not be felt for years.
“It should allow people to work in the clear rather than just the three or four government research centres,” he explained.
Big Pharma companies that have been ‘quietly working behind the scenes’ will finally be able to discuss cannabis in their pipeline publicly. Multinationals like Bayer and Novartis, previously cautious about jeopardising US operations, can now engage openly.
Clinical trials, FDA approvals, and pharmaceutical development timelines don’t move quickly, and legacy cannabis operators lack the regulatory infrastructure that Big Pharma has spent decades building.
Business of Cannabis will be publishing a series of articles diving into the detail of the realities of rescheduling in the coming weeks.
The post Rescheduling Optimism Fades, Cannabis Stocks Follow appeared first on Business of Cannabis.
Continue reading...
