In the wake of medical cannabis’ official reclassification as a Schedule 3 drug under federal law on Thursday, licensed marijuana companies are making big plans.
Operators told MJBizDaily they are prioritizing expansion across state lines, ramping up investments in research and development and preparing to comply with evolving federal safety and quality standards.
Businesses involved in cannabis research and science are seeking partnerships for clinical studies, while consumer-focused operators are developing strategies to meet anticipated federal regulations while also scaling.
“For us, this moment means staying focused on delivering reliable products, supporting our partners and continuing to build for a more structured regulatory environment,” Kim Sanchez Rael, CEO and co-founder of New Mexico-based rapid release solutions developer Azuca, told MJBizDaily.
What should cannabis companies do after medical rescheduling?
Acting Attorney General Todd Blanche’s order moved FDA-approved cannabis and cannabis produced by state-licensed medical marijuana operators to Schedule 3 of the Controlled Substances Act.
He also scheduled a hearing on removing cannabis from the CSA entirely, which would extend to adult-use cannabis, for June 29.
In response, cannabis operators told MJBizDaily they’re developing strategies to scale their operations responsibly and invest in technology and quality control systems.
“Completing the historic rescheduling of cannabis to Schedule 3 promises to unlock the full medical, research and commercial potential of this miracle plant and support the growth and normalization of America’s next great industry in the United States,” George Archos, CEO and co-founder of Chicago-based MSO Verano Holding Corp., said in a statement.
The focus moving ahead is to leverage the regulatory shift to drive growth, improve research, ensure consistent product safety and position themselves as leaders in an increasingly standardized industry.
“Rescheduling will allow responsible medical operators to reinvest in their workforce, strengthen compliance, and continue delivering safe, tested products to millions of patients,” Adam Rosenberg, chairman of the National Cannabis Industry Association, said in a statement.
Trump marijuana rescheduling means more preparation than celebration
Azuca’s Rael said the focus for operators should be on preparation – not celebration.
Instead of chasing volume, operators should be reinvesting in product quality, consistency and formats that drive margin.
Oregon-based flavor house True Terpenes, which provides cannabis-based flavoring agents to vaporizer-oil manufacturers and other operators, is pursuing strategies to take advantage of expanded research potential.
“Schedule 3’s biggest unlock isn’t tax – it’s research,” True Terpenes CEO Daniel Cook told MJBizDaily in an email.
True Terpenes will build on the research it has already conducted, including work with higher education research partners.
“We’re expanding that work to show that it’s not just potency that drives strain preferences but how a product smells, feels and ultimately connects with the consumer,” he added.
Does Trump rescheduling mean immediate tax relief?
Rescheduling means relief from Internal Revenue Code 280E, which forbids plant-touching businesses from making normal business deductions on their federal returns.
But with Schedule 3 only applying to medical cannabis operators for now, it’s not yet clear how this might affect the outstanding tax debt for major multistate operators that have both medical and adult-use retail outlets.
“The Administrator encourages the Secretary of the Treasury to consider providing retroactive relief from Section 280E liability for taxable years in which a state licensee operated under a state medical marijuana license,” the DOJ’s final rule, released Thursday, reads in part.
“Nothing in this rule constitutes a determination regarding federal tax liability, and state licensees should consult with tax counsel regarding the applicability of Section 280E to their specific circumstances.”
Whether 280E relief will be retroactive and apply to past years is likely a question that will be argued in tax court, several observers said.
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How should cannabis companies invest tax savings?
Ashwin Raj, CEO of wholesale platform LeafLink, sees rescheduling as the moment for companies to reinvest tax savings into expanding their market presence and scaling up their operations at a national level.
“We are actively working with our customers to expand operations and grow with confidence,” Raj said.
Cannabis decontamination company XRpure is prioritizing investments in quality control, environmental monitoring and advanced decontamination systems to ensure compliance with future national microbial limits and strict testing protocols.
“The biggest impacts to our particular business are … the potential overall expansion of the market due to allowance of interstate commerce and more standardized products,” XRpure founder and Managing Director Jeff Adams said.
