By Brian Vicente

As the world waits for an announcement from the Trump Administration regarding rescheduling, alternatives arise. The path forward on federal marijuana policy may come from executive actions on anything from banking to Tribal sovereignty.

After a years-long process, the rescheduling of cannabis from Schedule I to Schedule III under the federal Controlled Substances Act (CSA) looks promising but remains uncertain.  

As is true in most circumstances, understanding what comes next requires a clear picture of where we have been. So, how did we get to this point, and what’s next for cannabis under Trump?

Rescheduling: A Storied History and an Uncertain Future

It’s hard to believe, but rescheduling has been championed as a strong policy position for the federal government’s approach to marijuana for nearly three years now. Starting in October 2022 with an executive order by then-President Biden, the rescheduling process officially began with a mandate to the U.S. Department of Health and Human Services (HHS) to review the classification of marijuana under federal law. Nearly a year later, the HHS officially recommended that the U.S. Drug Enforcement Agency (DEA) reschedule marijuana from Schedule I under the CSA. By the beginning of summer 2024, the DEA had published a proposed rule and submitted it for public comment. Hearings were scheduled and participants were selected, but by January of this year, the entire process had halted indefinitely.

As of late August 2025, Trump publicly stated his administration was “looking at” rescheduling and would decide the issue within the coming weeks. In the time since, rumors have been swirling around how the Trump administration will approach cannabis policy. Even if the rescheduling efforts initiated during President Biden’s term end up perishing in the flames of partisan politics, this is not the end of the story on federal marijuana policy reform. Most media coverage has focused on whether cannabis lands in Schedule III. This piece intentionally looks beyond that to examine four other federal policy shifts that could prove just as consequential. Moving forward, there are several possible avenues for the federal government to come up to speed with the public consensus on the need for national cannabis policy changes. Here are the top four new cannabis policies that we might see from the Trump administration as we await an announcement on rescheduling. 

Top 4 New Federal Cannabis Policies Shifts Trump Could Push Forward Without Congress

Many cannabis industry advocates remain skeptical regarding the future of rescheduling under Trump. Rescheduling marijuana may or may not be a realistic outcome under this administration, but this does not imply that no changes are under consideration. The executive branch holds significant authority to reshape federal cannabis policy, even without Congress. These four policy moves represent the most likely shifts in federal cannabis policy that we will see under Trump aside from a rescheduling announcement.

Policy #1: New Federal Enforcement Memorandum

One of the most straightforward moves the Trump administration could make is to revive or update the Cole Memorandum. This Department of Justice (DOJ) guidance document had previously set enforcement priorities, ensuring federal prosecutors steer clear of targeting state-compliant medical cannabis programs. Reinstating this memo and expressly applying its updated terms to state-regulated recreational markets would give states, medical marijuana patients, and adult-use recreational cannabis consumers much-needed clarity without requiring congressional action. 

Policy #2: Improving Banking Access Through Executive Action

In the absence of a new Cole Memorandum, a standalone executive order could explicitly direct federal resources and scrutiny away from banks that service state-regulated cannabis operators. In effect, an executive order could establish a safe harbor for financial institutions and other financial service providers that choose to support cannabis businesses but are deterred from doing so under the current regime. Any protection that could shield banks from federal prosecution or regulatory overreach would relieve some of the compliance pressures financial providers feel when serving clients in the cannabis space. In addition to helping integrate cannabis businesses into the mainstream financial system, this would help lend greater regulatory certainty to a constantly evolving patchwork of state and local policies.

Policy #3: Tribal Cannabis Policy Clarification

The Trump administration could take steps to reinforce Tribal sovereignty in cannabis markets by reissuing the Wilkinson Memo, which recognizes Tribal authority over cannabis programs. The 2014 memorandum had extended the guidance of the earlier Cole Memo to Native American Tribes, ultimately deprioritizing enforcement of federal cannabis prohibitions on sovereign Native American lands. It was rescinded during the first Trump administration in 2018, but federal enforcement policy remains in line with the Cole and Wilkinson memoranda. Even so, the risk of a federal raid looms over Native American communities that are considering regulated cannabis programs, and an updated policy would greatly mitigate risk and bolster operational certainty. Vicente LLP, in partnership with the Indigenous Cannabis Industry Association (ICIA), released a first-of-its-kind map highlighting 56 Tribal cannabis and hemp initiatives across the United States in order to help contribute to the expanding narrative on Indigenous cannabis and hemp operations. 

Policy #4: Shift the Federal Narrative Away from Prohibition

Perhaps the most powerful step the administration could take is not legal, but rhetorical. If President Trump formally acknowledges cannabis’s undeniable medical value, we will have witnessed the first break in federal prohibitionist rhetoric in a generation. Any statement regarding the legitimacy of state and Tribal medical and recreational cannabis programs could begin to erode the decades of harmful stigma. Framed within the long-term vision of eventual descheduling, even a small narrative shift would help normalize cannabis in national discourse and pave the way for future reforms.

Conclusion

Hope remains for an imminent announcement regarding rescheduling. As the world watches and the cannabis industry waits, stakeholders hold out hope for intermediate reforms. 

Even if cannabis remains a Schedule I substance, executive action alone could reshape banking, enforcement, and state and Tribal sovereignty in ways that bring federal policy more in line with the public consensus regarding cannabis. Even if the only change we see in this presidential administration is a shift in the failed rhetoric of federal prohibition, we can count this achievement as an incremental win in the long and hard-fought battle towards responsible cannabis regulation. 

Brian Vicente is a founder of the leading cannabis law firm Vicente LLP.

This article is from an external, unpaid contributor. It does not represent High Times’ reporting and has not been edited for content or accuracy. 

The Trump White House, Public domain, via Wikimedia Commons

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President Joe Biden announced that the U.S. Department of Justice will officially reschedule cannabis, moving it from Schedule I, reserved for dangerous drugs with no medical value, to Schedule III. The news follows the historic announcement on April 30, that the U.S. Drug Enforcement Administration (DEA), will move to reclassify cannabis under Schedule III, the Associated Press reported.

Biden, along with Vice President Kamala Harris, both recorded videos of the announcement and posted them on social media.

“This is monumental,” Biden said in a video that was posted on X. “Today my administration took a major step to reclassify marijuana from a Schedule I to a Schedule III drug. It’s an important move towards reversing longstanding inequities.”  

“Today’s announcement builds on the work we’ve already done to pardon a record number of federal offenses for simple possession of marijuana. And it adds to the action we’ve taken to lift barriers to housing, employment, small business loans, and so much more for tens of thousands of Americans.”

Biden continued, “No one should be in jail just for using or possessing marijuana.”

“Today’s announcement builds on the work we’ve already done to pardon a record number of federal offenses for simple possession of marijuana. I’m committed to writing those historic wrongs,” he said. “You have my word.

“Currently marijuana is classified on the same level as heroin and more dangerous than fentanyl,” Harris said in another video. “We are finally changing that. But I want to thank all of the advocates and everyone out there for helping to make this possible and we are on the road to getting it done.” 

“This recommendation validates the experiences of tens of millions of Americans, as well as tens of thousands of physicians, who have long recognized that cannabis possesses legitimate medical utility,” NORML Deputy Director Paul Armentano said. “But it still falls well short of the changes necessary to bring federal marijuana policy into the 21st century. Specifically, the proposed change fails to harmonize federal marijuana policy with the cannabis laws of most U.S. states, particularly the 24 states that have legalized its use and sale to adults.”

“Nevertheless, as a first step forward, this policy change dramatically shifts the political debate surrounding cannabis,” Armentano added. “Specifically, it delegitimizes many of the tropes historically exploited by opponents of marijuana policy reform. Claims that cannabis poses unique harms to health, or that it’s not useful for treating chronic pain and other ailments, have now been rejected by the very federal agencies that formerly perpetuated them. Going forward, these specious allegations should be absent from any serious conversations surrounding cannabis and how to best regulate its use.”

A 60-day comment period will soon begin to allow input on the pros and cons of Schedule III.

Questions and Shortcomings of Schedule III

Industry leaders pointed out that reclassifying cannabis under Schedule III won’t absolve the discord between federal law and dozens of medical adult-use cannabis laws at the state level. For some, the reclassification announcement leads to more questions.

“While there’s still work to be done, I’m optimistic about what this means in terms of a domino that needed to fall in order for the wave to come that we’ve all been waiting for and working towards for so long,” said Caleb Counts, CEO & Co-Founder, Connected Cannabis. “Rescheduling is a step in the right direction without question, and while it isn’t at the stage of descheduling, it’s still impactful for so many people and that doesn’t go unnoticed. Loosening taxes and regulations where customers benefit is always a win in my book.”

“While a great step for the industry, the truth is, most of our operational challenges remain,” said Roger Volodarsky, Founder and CEO, Puffco. “A lot of people think that moving cannabis from Schedule I to Schedule III will drive additional research in the space, but the reality is that it’s more complicated than that. In late 2022, the Medical Marijuana Expansion Research Act was passed, which essentially says that regardless of the scheduling of cannabis, the DEA still holds the final ruling of who’s allowed to research the plant, and where those research materials are coming from. So while a move to Schedule III is a huge step forward in terms of protecting our freedoms in this industry, we are still at the mercy of policy-makers. Ultimately, the goal is a complete descheduling of the plant and until that happens our fight is not over.”

“For me, it raises more questions than solving any problems that we have,” said Christopher Louie, Co-Founder & CEO of Made in Xiaolin, a legacy cannabis operator in Colorado and soo in New York. “What does this mean from here? Great, marijuana now has medical benefits in the eyes of the government. Does this mean that in order to obtain it you need a prescription and in order to distribute or manufacture it I would need a medical license? It seems this could help out pharmaceutical companies and big businesses affiliated in the medical field, but I’m not sure how this benefits companies like ours.”

Others commended the small step towards legalization that signals a shift in the way cannabis is viewed in the eyes of the federal government.

“We commend the POTUS’s efforts to reschedule cannabis to Schedule III. While the fight isn’t over to legalize cannabis nationally, this is a much-needed wind in our sails that we haven’t felt in over 50 years at the federal level,” said Vince Ning, co-founder and CEO of Nabis, a leading wholesale marketplace. “As far as public commentary goes, we will certainly be providing our thoughts on how to improve this change to push for the full legalization of this controlled substance, and how to provide safe access of quality tested cannabis products to the patients in need through existing regulatory frameworks that currently exist today.”

“President Biden characterized rescheduling as a means of reversing longstanding inequities,” said Brian Vicente, founder of Vicente LLP. “One dominating inequity cannabis businesses face is the inability to deduct regular business expenses, since they sell a Schedule 1 substance.  We work with hundreds of licensed cannabis businesses, and the ability to deduct ordinary operating costs under the Schedule 3 proposal would be a game-changer for them. This proposal will release cannabis businesses from the crippling tax burden they are currently shackled with and allow these businesses to grow and prosper.”

“On behalf of thousands of legal businesses operating across the country, we commend President Biden for taking this important first step toward a more rational marijuana policy. Now it’s time for Congress to enact legislation that would protect our industry, uphold public safety, and advance the will of the voters who overwhelmingly support making cannabis legal for adults,” said Aaron Smith, NCIA CEO & co-founder. “Rescheduling alone does not fix our nation’s state and federal cannabis policy conflict. Only Congress can enact the legislation needed to fully respect the states and advance the will of the vast majority of voters who support legal cannabis.”

There will then be a 60-day public comment period before the rule is potentially finalized.

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Senator Mitt Romney of Utah and two of his Republican colleagues have sent a letter to the Drug Enforcement Administration, urging the law enforcement agency to decline a bid to reschedule marijuana under federal drug laws. Cannabis is currently listed under Schedule I of the federal Controlled Substances Act (CSA), a designation reserved for drugs with no accepted medical value and a high potential for abuse.

The letter, which was signed by Romney and Republican Senator Jim Risch of Idaho and Nebraska’s Senator Pete Ricketts, was addressed to Drug Enforcement Administrator Anne Milgram. All three lawmakers are members of the Senate Foreign Relations Committee. In the letter, the senators expressed concerns over a Biden administration proposal to reclassify cannabis under the CSA. 

In August 2023, the Department of Health and Human Services (HHS) recommended that the DEA reclassify marijuana by moving it from Schedule I of the CSA to Schedule III, a classification intended for “drugs with a moderate to low potential for physical and psychological dependence” such as Tylenol with codeine or ketamine. The trio of Republican senators urged the DEA administer to carefully consider the HHS proposal.

“Any effort to reschedule marijuana must be based on proven facts and scientific evidence — not the favored policy of a particular administration — and account for our treaty obligations,” the senators wrote in their letter.

The senators noted in their letter that cannabis is controlled by international treaty, “which is not surprising given its known dangers and health risks — and the United Nations International Narcotics Control Board (INCB) has fiercely criticized efforts to legalize marijuana in other countries as a violation of the treaty.”

International policy on marijuana is governed by the Single Convention on Narcotic Drugs, an international treaty adopted in 1961 and ratified by the U.S. Senate in 1967. Under the treaty, the United States is required to implement certain controls over drugs covered by the international agreement, including marijuana. The CSA implements those treaty obligations in U.S. domestic law and requires the U.S. Attorney General to place marijuana in the schedule that he or she deems most appropriate to carry out the country’s obligations under the Single Convention.

“In prior rescheduling proceedings, the DEA has determined that section 811(d) requires it to classify marijuana as a schedule I or II drug in order to comply with our treaty obligations under the Single Convention,” the letter continued, referring to the relevant section of the international treaty.

“It is important that the DEA continues to follow the law and abide by our treaty commitments,” the senators wrote. 

The senators also requested more information including whether rescheduling marijuana would affect whether other countries comply with drug treaty provisions “including for deadly narcotics like fentanyl,” asking the agency to respond to a list of questions by April 12.

The letter also cites a recent study that showed that daily marijuana use was associated with a 25% increase in the risk of a heart attack and a 42% increase in the risk of stroke. They also noted that other research has linked cannabis use “with serious psychotic consequences, including schizophrenia and bipolar disorder.”

On Wednesday morning, Romney took to social media to share the letter he and his Republican colleagues sent to Biden administration officials at the DEA.

“To be blunt: rescheduling marijuana may cause the U.S. to violate obligations under the Single Convention on Narcotic Drugs,” Romney wrote on X, the social media platform formerly known as Twitter. “Efforts to reschedule marijuana must be based on evidence, not politics, and @DEAhq must ensure we abide by our treaty commitments.”

Despite the senators’ fears, Jason Adelstone, a senior associate attorney with national cannabis law firm Vicente LLP, said that international treaties do not preclude the federal government from reclassifying cannabis under Schedule III of the CSA.

“The erroneous and unsubstantiated fears about marijuana are based on fictional ‘war on drugs’ themes and not the current state of medical and scientific knowledge about marijuana,” he wrote in an email to High Times. “The letter contained several incorrect statements, including the mistaken assumption that moving marijuana to Schedule III would somehow violate the Single Convention.”

“However, the Single Convention specifically endorses ensuring medical and scientific access to controlled substances,” Adelstone continued. “Moving marijuana to Schedule III would better promote medical and scientific access to marijuana.”

The DEA is currently reviewing the HHS proposal to reschedule marijuana, but the agency has not announced a timeline for the decision.

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Amsterdam, a city long associated with relaxed weed rules, has been left out of a pilot experiment with legal cannabis sales now underway in the Netherlands. In a vote last week in the Netherlands’ lower house of Parliament known as the Tweede Kamer, lawmakers excluded Amsterdam from a list of cities to be added to the European country’s experiment with regulated cannabis cultivation and distribution. The Tweede Kamer also voted against an attempt by conservative lawmakers to halt the experiment, which will be expanded this summer to 10 cities across the Netherlands.

The experiment launched late last year in the Dutch cities of Breda and Tilburg. Under the pilot program, which will soon be launched in eight more cities, the government is regulating the cultivation and sale of recreational cannabis. 

Although the Netherlands in general and Amsterdam in particular are known for a pragmatically tolerant outlook on weed, cannabis is still illegal nationwide. Despite the prohibition, cannabis is easily available at so-called coffeeshops, which offer a range of weed products including flowers, joints and hash to adult customers. The coffee shops, which number approximately 565 nationwide, are supplied by underground growers who are generally allowed to operate without government interference.

Many government officials are concerned, however, that organized crime groups have taken over cultivation of much of the weed that ends up in coffeeshops in the Netherlands. This concern led to the country’s first experiment with regulated adult-use cannabis cultivation and distribution. 

The experiment began in December and is being rolled out in select municipalities under what the government calls a “closed coffeeshop chain experiment.” The initial phase of the experiment is expected to extend for six months in as many as 11 cities.

“During the startup phase, growers, coffeeshop owners, transporters and supervisors will gain experience with the supply and sale of regulated cannabis and its supervision, secure transport and the use of the track and trace system,” the Ministry of Health, Welfare and Sport said in a statement, according to a report from the Associated Press.

Later this year, the Netherlands’ experiment with regulated cannabis will be expanded to the cities of Almere, Arnhem, Groningen, Heerlen, Voorne aan Zee (formerly named Hellevoetsluis), Maastricht, Nijmegen and Zaanstad. City leaders in Amsterdam hoped to join the experiment, despite some claims that doing so would make it easier for underage youth to get weed.

“The experiment will not make access to drugs easier for young people. It just means that the production and distribution will be removed from criminals” Amsterdam Mayor Femke Halsema told the publication NL Times, according to a report from MJBizDaily.

“This actually protects public health and facilitates enforcement policy. If you want to control cannabis use better, you must also check the ‘back door.’”

Amsterdam’s bid to be included in the experiment was denied by a March 5 vote by the Tweede Kamer. While the proposal had the support of the Netherlands left-wing and centrist parties, conservatives in the far-right Christian SGP and the far-right nationalist PVV political parties defeated the bid by a vote of 78-72, according to a report from Forbes.

Amsterdam Exclusion ‘No Surprise’

The exclusion of Amsterdam from the cannabis legalization experiment was not unexpected, says Jason Adelstone, a senior associate attorney at the cannabis law firm Vicente LLP, where he focuses on federal and international policy.

“I am not surprised that members of the Netherlands Parliament opposed the proposal for allowing Amsterdam to join the Dutch marijuana experiment,” Adelstone writes in an email to High Times. “With the far-right nationalist PVV party being the largest party in the Tweede Kamer, expanding the marijuana pilot program to include Amsterdam was a difficult proposition. Thankfully, those opposed to the marijuana pilot program didn’t have enough support to pause or completely stop the program altogether.”

Michael Sassano, founder, chairman and CEO of Somai Pharmaceuticals, a Lisbon-based manufacturer of therapeutic cannabis products, agrees that there “is no surprise that Amsterdam was ‘excluded’ from the program.” 

“The reality is that the Amsterdam coffee shop owners are very happy with their supply agreements both in quality and pricing,” Sassano said in a statement to High Times. “Most coffee shop owners understand that it will take some time for the legal Grow’s to get up to the current quality standards, and also the price will be higher. As the Netherlands progresses, going to a legal market for the entire country will be inevitable but it takes time and infrastructure to achieve this goal.”

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The U.S. Cannabis Council (USCC) announced on June 28 that it has created Legalize America, which is the first United States’s Super Political Action Committee (or Super PAC) that is specifically dedicated to cannabis reform. A Super PAC is an “independent expenditure only political committee” that can receive unlimited contributions from various sources “for the purpose of financing independent expenditures and other independent political activity,” according to the Federal Election Commission.

“We’re excited to share that we’ve launched Legalize America, the nation’s first Super PAC devoted to cannabis reform. The new independent expenditure group will work to raise the profile of cannabis as a national issue in the 2024 election and beyond,” the USCC wrote on Twitter.

Legalize America also states how it plans to take action. “We are committed to working with advocates, industry professionals, and community leaders to create policies that support cannabis legalization in a thoughtful and responsible manner,” it stated on its website. “Our primary focus is on promoting federal legalization, expunging records for non-violent cannabis offenses, and ensuring that the benefits of legalization reach all Americans, regardless of race, ethnicity, or socioeconomic status.”

Legalize America has garnered support of numerous cannabis companies with the intent of raising awareness for cannabis reform in next year’s election and in the future. Legalize America Chair Matt Harrell, who also holds the position of vice president of government relations with Curaleaf, explains what Legalize America plans to accomplish. “Legalize America is committed to ending cannabis prohibition and advancing expungement efforts and responsible use,” said Harrell. “We will use all available tools—including scorecards, endorsements, and targeted independent expenditure campaigns—to advance cannabis reform, with the goal of creating a prosperous and equitable cannabis industry.”

David Culver, senior vice president of public affairs with the USCC, told Market Watch that congress is not doing its job in reflecting the will of the people. “Congress is stuck in the past,” Culver said. “They’re way behind what Americans want. It’s not unusual for Congress to be a lagging indicator.”

Legalize American Secretary Pete Meachum, also senior director of government affairs at the Cronos Group, explained that action is needed now to help push legalization along. “We believe the 2024 presidential election will be a pivotal moment in the fight to end cannabis prohibition,” said Meachum. “We are laying the groundwork now to use advertising, grassroots engagement, voter outreach and events to keep cannabis front and center throughout the campaign.”

Legalize America added that it plans to partner with “high-profile public figures and brands” to raise funds and support reform efforts. It also plans to work with legal dispensaries to ask consumers for “round up” donations.

The USCC member list currently includes 38 companies, such as Ayr Wellness, Cresco Labs, Green Thumb Industries, Scotts Miracle-Gro, Vicente LLP, Wana Brands, and more. It’s led by chair Jessica Billingsley of Akerna, Vice Chair Dan Pabon of Schwazze, Meachum as treasurer, and chair emeritus Christian Sederberg of Vicente Sederberg LLP.

News regarding the 2024 election continues to take shape, with candidates speaking in support or opposition of cannabis and other psychedelic substances. Last week, current Florida Gov. Ron DeSantis stated that if elected to become president, he would not decriminalize cannabis. “I don’t think we would do that,” he said in response to an individual who represents military veterans who could benefit from decriminalization. “If you do something with that, it could be goodnight right then and there. You could die just by ingesting that, so I think that that’s problematic.”

However in June, former New Jersey Gov. Chris Christie said that he would partially end the War on Drugs if he is elected. At a CNN townhall, he addressed a question from a mother whose son was put in prison for fentanyl use, asking what he would do “about the war on drugs, which has obviously failed so miserably.”

“End it,” Christie said. “I want to focus on treatment. Look, your son—and I don’t want to pretend to know him, but I know a lot of people have gone through this. And I’ve had some dear friends who have lost their life to this. He has a disease the same way heart disease, diabetes, cancer. It is a disease, and he can be treated.”

Back in December 2024, musician Afroman announced that he is also running for president in 2024 with the intent of legalizing cannabis. “There comes a time in the course of human events when change must be affected,” said Afroman’s campaign manager. “That time is now. Americans are suffering, and the status quo is no longer acceptable.”

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Regulated sales of recreational marijuana begin in Maryland on Saturday, leaving retailers with only days to prepare for the launch of legal adult-use cannabis in the state. 

In November, Maryland voters legalized recreational marijuana with the passage of Question 4, a state referendum that was approved with nearly two-thirds of the vote. In April, lawmakers passed legislation to regulate adult-use cannabis production and sales beginning on July 1, followed by the signing of the bill by Governor Wes Moore early last month. Under the measure, all adults in Maryland age 21 and up will be allowed to purchase regulated cannabis products including flower, vapes, gummies and more from the state’s existing medical marijuana retailers.

The legislation also changed the Maryland Medical Cannabis Commission, which regulated the production and sale of medical marijuana, to the Maryland Cannabis Administration. Will Tilburg, the acting director of the new agency, said that regulated sales of cannabis in Maryland are expected to triple over the next year with the advent of adult-use sales.

“There’s more than 4 million eligible consumers versus 168,000 medical patients,” Tilburg said, according to a report in local media.

Meg Nash, a partner at the cannabis and psychedelics law firm Vicente LLP, praised Maryland’s lawmakers and regulators for their quick action to implement adult-use cannabis legalization.

“Maryland’s swift implementation of its adult-use cannabis program is remarkable, and will hopefully serve as a model for other states that share the policy goals of increased access to safe cannabis products and to deterring participation in the unregulated industry,” Nash wrote in an email to High Times. “The Maryland Cannabis Administration shows no signs of slowing down, as a new licensing round that will be exclusively available to social equity applicants is expected to be announced in the coming months, with new licensees selected via lottery before the end of the year.”

Medical Marijuana Companies Prepare for New Customers

The impending start of licensed recreational marijuana sales in Maryland has prompted the state’s licensed medical marijuana providers to prepare for the influx of new customers expected with the legalization of adult-use cannabis. Jake Van Wingerden, the owner of SunMed Growers in rural Cecil County, told the Baltimore Sun that he and his staff of 150 workers have been busy harvesting and processing marijuana products to prepare for the upcoming launch of recreational marijuana sales in Maryland.

“We cranked it up,” Van Wingerden said of the company’s production. “We believe that demand will skyrocket for those first couple months.”

The company has been stockpiling cannabis flower for Saturday’s launch and added an extra shift for packaging cannabis products. SunMed has also purchased new delivery vehicles and built a $16 million, 25,000-square-foot facility to make weed edibles.

Maryland MMJ Legalized in 2014

Maryland legalized medical marijuana in 2014 and regulated sales began in 2017. The state’s adult-use cannabis legalization bill allows medical marijuana operators to pay a fee to upgrade their license to serve recreational customers, a provision that was added to the legislation to ensure a swift launch of regulated sales. When purchases of adult-use cannabis begin on Saturday, approximately 100 medical marijuana dispensaries across the state will be ready to serve recreational marijuana customers.

Maryland state Delegate C.T. Wilson led efforts in the legislature to legalize cannabis for adults. Drafting the legislation presented challenges, he says, because lawmakers wanted to ensure a smooth transition to the regulated market. They also wanted to establish a market with wide availability and low prices to challenge the success of the illicit cannabis economy. Another aim was to avoid the racial disparity seen in Maryland’s medical marijuana industry, which is dominated by white-owned companies.

“The goal, again, is to make sure this is fair and equitable,” Wilson said. “But we need to have product available on the market July 1.”

In addition to allowing the state’s medical marijuana operators to serve adult-use customers, the cannabis regulation bill passed in April includes social equity provisions to encourage diverse ownership in the industry. Van Wingerden applauded the state’s lawmakers for their swift work to regulate adult-use cannabis that saw the legislation drafted and passed less than six months after voters ended the prohibition on recreational marijuana.

“It’s a heavy lift and they did it fairly quickly. Hats off to the General Assembly and the people behind the scenes,” he said. “They got it all done and I think it’s going to be a model for the rest of the country.”

Mitch Trellis of medical cannabis operator Remedy said that the company’s dispensaries in Baltimore County and Columbia are larger than most medical marijuana retailers, with each store featuring more than 9,000 square feet, a minimum of 20 cash registers and parking lots that can accommodate hundreds of cars. Typically, the dispensaries serve 300 to 600 patients daily. But when recreational marijuana sales begin on Saturday, the number of customers served each day could climb as high as 2,000.

“Expect long lines at most places. It’s going to be hot,” he said. “People are definitely excited.”

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The regulated marijuana market in Minnesota is expected to grow to more than $1.5 billion per year by 2029, according to a projection from a leading cannabis law firm. As the market matures, Minnesota cannabis businesses are projected to serve nearly 700,000 adult-use cannabis customers and medical marijuana patients across the state. 

At a recent seminar on cannabis entrepreneurship hosted by Surly Brewing in Minneapolis, Travis Copenhaver, a partner at cannabis and psychedelics law firm Vicente LLP, said Minnesota’s legalization of adult-use cannabis, which was signed into law by Democratic Governor Tim Walz last month, presents new economic opportunities for entrepreneurs in the state.

“The growth of Minnesota’s cannabis market will be a lucrative opportunity for people interested in the adult-use cannabis market,” said Copenhaver.

The market analysis from Vicente projects that the growth of Minnesota’s adult-use cannabis market will largely follow patterns in other states that have legalized recreational marijuana for adults. Once adult-use cannabis sales begin, the market is expected to be characterized by limited supplies of recreational marijuana, leading to high prices. But as more producers and retailers enter the market, supplies will increase and prices will drop, with the state’s total cannabis economy expected to peak at about $1.5 billion per year by the end of the decade.

The projection estimates that approximately 650,000 Minnesotans, about 15% of the state’s population aged 21 and up, will consume cannabis on a monthly basis or more frequently. But getting current recreational cannabis consumers to transition to the regulated market will not happen overnight. The analysis projects that it will take until 2030 for the vast majority of consumers to buy cannabis from regulated retailers.

New Products For New Customers

Brian Vicente, founding partner at Vicente LLP, said that Minnesota’s consumers have been primed for the legalization of cannabis for adults with last year’s legalization of hemp-derived edibles and beverages. He also noted that consumers in neighboring states that have not yet legalized recreational marijuana and other visitors to Minnesota will also help fuel the growth of adult-use cannabis sales in the state.

“I think Minnesota stands to have a fair amount of tourist traffic from individuals that are coming from Iowa and North Dakota … to buy Minnesota products,” Vicente said.

Colin Ferrian, a Minnesota native and cannabis industry veteran who serves as a portfolio manager for the cannabis investment firm Poseidon, recently said that the legalization of recreational marijuana will lead to new innovations in the regulated cannabis industry.

“Minnesota is poised to become the most innovative location for cannabis products and branding, upon Governor Walz’s approval of adult-use legalization,” Ferrian said in a statement to Forbes. 

“Last July, the state was the first in the country to allow hemp-derived drinks and edibles to be sold across many of the channels where consumers could find alcohol, and soon, Minnesotans over the age of 21 will also be able to access flower and extracted products in dispensaries,” Ferrian added.

Minnesota Legalized Cannabis Last Month

Minnesota ended the prohibition on marijuana last month when Walz signed legislation to legalize adult-use cannabis. The legalization bill, which was approved by the Minnesota legislature on May 20, allows adults 21 and older to use marijuana recreationally and to possess up to two ounces of cannabis in a public place, beginning on August 1.

The bill also legalizes the possession of up to two pounds of marijuana in a private residence and the limited home cultivation of cannabis by adults aged 21 and older. Under the legislation, adults would be allowed to grow up to eight cannabis plants at home, including four mature, flowering plants.

The bill also legalizes commercial cannabis production and sales, with regulated sales of recreational marijuana coming after rules are drafted and approved by the Office of Cannabis Management, a new state agency created by the legislation. The new agency will also regulate medical marijuana and cannabis products derived from hemp.

State agencies have set a target date of May 2024 to begin accepting applications for adult-use cannabis retailers, according to a report from Minnesota Public, with dispensary sales of recreational marijuana anticipated to start in January 2025. Once regulated sales of recreational marijuana begin, adults will be permitted to purchase up to two ounces of cannabis, eight grams of cannabis concentrate and edible products containing up to 800 milligrams of THC.

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A bill pending before Connecticut state lawmakers would allow businesses in the state’s nascent cannabis industry to take tax deductions commonly enjoyed by firms in other industries. If passed by the legislature and signed into law, the legislation is projected to save businesses in the cannabis industry $4.7 million in the fiscal year starting July 1, growing to nearly $10 million by 2026.

In many states that have legalized marijuana for recreational or medical purposes, tax laws follow the lead of Section 280E of the federal tax code, which denies most standard business tax deductions for cannabis businesses. Under the rule, cannabis businesses are only allowed to deduct the cost of goods sold, while deductions for other business expenses such as rent, payroll and utilities are not allowed for most operators. 

Under the bill from Democratic Representative Jason Rojas, the House majority leader, cannabis businesses would be permitted to deduct standard business expenses on their state tax returns, although Section 280E would still apply to the firms’ federal tax liability. While the measure will not result in a huge windfall for cannabis companies, the change is expected to make Connecticut businesses more competitive with recreational marijuana dispensaries in neighboring Massachusetts and Rhode Island, where prices are significantly lower.

“Everyone I’ve met says it’s an incredibly challenging business to get into, particularly because of the capital costs that are needed, but also the regulatory environment is very complicated as well because you are dealing with a controlled substance that is still illegal at the federal level,” Rojas told the Hartford Business Journal about the legislation. 

“Anything that can be done to help reduce the cost of doing business, I think is to the benefit of the state, if we want to see this marketplace actually succeed,” he added.

Adam Wood, president of the Connecticut Cannabis Chamber of Commerce, said that Rojas’ bill would benefit both businesses and consumers. The tax deduction would also likely result in lower retail prices, bringing more consumers to the regulated market and increasing tax revenue over time.

“Every other business in the state is allowed to deduct overhead, equipment, labor,” Wood told CTInsider. “Our argument is that allowing for these state tax deductions will actually drive down the price because net operating costs would not be as high. When pricing is reasonable or under control, the regulated market grows, and sales taxes from these businesses will increase.”

The lack of standard business deductions makes it difficult for entrepreneurs to succeed and grow their businesses. The burden is particularly tough for social equity businesses, which often face added difficulty raising business capital to launch their enterprises. Tiana Hercules, a Hartford, Connecticut city council member who was recently awarded a provisional cannabis cultivation license through the state’s Social Equity Council, said last week that the federal tax rule has its roots in the War on Drugs.

“We’re being penalized as if we were not legitimate businesses,” Hercules said. “As a person in the social equity program, we are supposed to be developing business acumen and hopefully make a living and build some generational wealth as well. We should be able to reinvest in the business, staff and innovation as well. It makes a lot of sense if Connecticut wants a competitive and thriving cannabis industry. We’re ready to create a lot of excitement.”

So far, 19 states with legal cannabis, including nearby New York and Massachusetts, have decoupled their tax laws from the federal Section 280E to allow firms in the industry to take business deductions. The bill from Rojas, HB 5413, is currently under consideration by the Connecticut General Assembly’s Finance, Revenue & Bonding Committee. 

“Connecticut is smart to look for ways to help its fledgling adult-use businesses to succeed, and providing state-level tax deductions is a time-tested method,” Brian Vicente, founding partner of cannabis law firm Vicente LLP wrote in an email to High Times. “For too long state-legal marijuana businesses have been beholden to draconian federal taxes, and allowing cannabis businesses to make traditional deductions of overhead, equipment, and labor will lead to more healthy businesses in Connecticut. Connecticut is poised to follow a trend of Northeastern states that have adopted state tax reforms for cannabusinesses, including New York and Massachusetts.”

The Legislative Finance Committee will soon begin voting on items to be included in the budget for the next fiscal year. In an interview with local media, the bill’s sponsor said he hopes his colleagues in the legislature will support the tax changes in HB 5413.

“It’s going to be part of the larger discussion on revenue and whether we can approach this differently because it is a revenue loss and there are a lot of priorities,” Rojas said. “But it’s a burgeoning marketplace and we’re seeing what the other states are doing. It’s consumer friendly. My hope is there will be room in the budget for it.”

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