Cannabis Legalization in the Trump Era: Rescheduling, State Battles, and the Future of Federal Reform

The U.S. cannabis industry has spent years navigating a maze of shifting policies, legal loopholes, and political uncertainty. Now, with Donald Trump back in the White House for a second term, the future of federal cannabis reform is once again up in the air. Will rescheduling finally provide long-awaited relief for businesses, or will new roadblocks emerge? Let’s break down what’s at stake in 2025.

Rescheduling or Roadblock? The Federal Cannabis Debate in 2025

They say history repeats itself, but when it comes to cannabis reform, it feels more like a never-ending game of “Will They, Won’t They?”—like the Ross and Rachel of American drug policy. Except instead of romantic tension, we get a bureaucratic tug-of-war between lawmakers, regulators, and an industry desperate for clarity.

Now, with Donald Trump back in the Oval Office in 2025, cannabis businesses and advocates are once again wondering: Will this be the year federal cannabis laws finally evolve, or are we in for another round of political limbo? The good news: momentum for reform has never been stronger. The bad news: Trump’s cabinet picks and Republican control of Congress could make rescheduling—and broader legalization—far from a done deal.

The Big Question: Will Cannabis Be Rescheduled in 2025?

The most anticipated cannabis policy shift this year is the potential rescheduling of marijuana under the Controlled Substances Act (CSA). Under President Biden, the Department of Health and Human Services (HHS) recommended in 2023 that marijuana be moved from Schedule I (where it’s currently classified alongside heroin and LSD) to Schedule III, a category that includes drugs with accepted medical uses, like Tylenol with codeine.

In April 2024, the Drug Enforcement Administration (DEA) announced it would initiate a formal rulemaking process to reclassify cannabis—a move that sent shockwaves through the industry. If finalized, this change would provide massive benefits for cannabis businesses by exempting them from IRS tax code Section 280E, which currently prevents them from deducting business expenses. In other words, they’d finally be taxed like normal businesses instead of drug cartels.

However, the DEA’s rulemaking process is ongoing, and with Trump now in charge, the cannabis industry is holding its breath. The agency’s final decision is expected later in 2025, but the appointments Trump makes—especially his pick for DEA Administrator—will heavily influence the outcome.

Trump’s Stance on Rescheduling: Is He Pro-Weed or Just Pro-Business?

Despite his reputation as a wildcard, Trump has actually shown some support for cannabis reform—at least in ways that benefit businesses. During his 2024 campaign, he stated on Truth Social that he supported the rescheduling of marijuana, and he even expressed openness to recreational cannabis in Florida.

However, there’s a major difference between campaign rhetoric and policy action. While Trump signed the 2018 Farm Bill into law—effectively legalizing hemp-derived products like CBD—his first administration was not exactly friendly to cannabis. His Attorney General, Jeff Sessions, rescinded the Cole Memorandum in 2018, which had previously protected state-legal cannabis businesses from federal interference. Trump later walked back some of this hostility, but his record on cannabis remains mixed.

Now, with a second term underway, the cannabis industry is watching closely to see whether Trump will follow through on his rescheduling support or allow his more conservative cabinet members to stall the process.

The Role of Trump’s Cabinet: Who’s Driving Cannabis Policy?

Even if Trump remains neutral or mildly supportive of cannabis reform, his administration’s key appointments could determine whether progress moves forward—or hits a wall.

Attorney General Pam Bondi: Trump’s pick for Attorney General, Pam Bondi, has historically opposed cannabis legalization. As Florida’s Attorney General, she fought against medical marijuana expansions. If she maintains that stance at the federal level, she could influence how the Justice Department enforces cannabis laws.
DEA Administrator: The DEA has the final say on rescheduling, and Trump’s choice for the agency’s leadership will be a make-or-break factor. If he appoints a hardliner, the rescheduling process could be delayed indefinitely.
FDA Commissioner Marty Makary: Makary has referred to cannabis as a gateway drug and expressed concerns about its long-term effects. Since the FDA plays a role in regulating cannabis-based medical treatments, his views could slow down progress on medical marijuana research and approvals.

With these key figures in place, cannabis reform advocates are concerned that the Trump administration might not actively block rescheduling—but they could certainly drag out the process.

Congress and Cannabis: What’s on the Legislative Agenda?

With Republicans controlling Congress, broad federal legalization is unlikely in the near term, but some incremental reforms could still gain traction. A few key bills to watch include:

The SAFER Banking Act: This legislation, an updated version of the SAFE Banking Act, would allow cannabis businesses access to traditional banking services without fear of federal penalties.
The States Reform Act: This Republican-led bill would fully deschedule cannabis and leave regulation up to individual states.
The STATES 2.0 Act: Another states’ rights-focused bill, this would amend the CSA to ensure that legal cannabis businesses operating in compliance with state laws aren’t subject to federal prosecution.

While Trump’s stance on these bills remains unclear, his previous support for state-level decision-making suggests that at least some of these measures could see progress.

The Verdict: Rescheduling Is Likely, but Full Legalization Is Not

With all signs pointing toward cannabis moving to Schedule III in 2025, the industry is cautiously optimistic. However, full federal legalization remains a long shot under the current administration. Instead, expect continued legal ambiguity, state-by-state expansion, and potential new hurdles as conservative policymakers take the reins.

At the end of the day, the cannabis industry is no stranger to political uncertainty. For now, businesses, advocates, and consumers will have to wait and see whether Trump’s second term brings long-overdue reform—or another round of stalled progress.

The State-Led Legalization Push – Progress or Stagnation?

For years, state-level cannabis legalization has been the driving force behind the industry’s growth, even as federal lawmakers dragged their feet on reform. But after a decade of momentum, the results of the 2024 election have raised new questions: Has the green wave stalled, or is legalization simply entering a new, more complex phase? While some states are still pushing forward, others are facing unexpected roadblocks, signaling that the path to full national legalization remains anything but straightforward.

Mixed Signals: What the 2024 Election Results Mean for Cannabis

Heading into 2024, cannabis advocates were hoping for another round of victories at the state level. Instead, they were met with a reality check. Legalization efforts struggled at the ballot box, with measures failing in key states such as Florida, North Dakota, and South Dakota. In Arkansas, a court battle prevented votes on legalization from even being counted. The only successful ballot initiatives came from Nebraska, but even those are now tied up in legal challenges.

So, what went wrong? A few key factors:

Republican-Led Resistance: As more red states were targeted for legalization efforts, conservative opposition ramped up. Many Republican lawmakers who once tolerated medical marijuana are now pushing back against recreational use.
Weak Turnout and Shifting Voter Priorities: While cannabis remains popular, economic concerns and other political issues took center stage in 2024, potentially lowering enthusiasm for reform measures.
Legal Challenges: Even when legalization measures gain support, lawsuits and legislative obstacles continue to delay implementation, as seen in states like Arkansas and Nebraska.

Despite these setbacks, cannabis reform is far from dead. The fight has simply moved from the ballot box to state legislatures, where lawmakers in key battleground states like Pennsylvania and Hawaii are now at the center of the legalization debate.

The Pennsylvania Question: A New Model for Legalization?

Pennsylvania is shaping up to be one of the most closely watched states for cannabis reform in 2025. Sandwiched between fully legal neighbors like New York, New Jersey, and Ohio, Pennsylvania is feeling the pressure to legalize recreational cannabis—not just to appease public demand, but to capture the tax revenue that’s currently flowing into other states.

Governor Josh Shapiro has been vocal about his support for legalization, and he even included projected cannabis tax revenues in his latest budget proposal. But passing a legalization bill through Pennsylvania’s divided legislature remains a major challenge.

The biggest sticking point? How the state should regulate cannabis sales. Pennsylvania lawmakers have floated a controversial idea: selling recreational cannabis through state-run dispensaries, similar to how liquor sales are handled. This proposal is intended to address concerns about public safety and regulatory oversight, but it also raises several questions:

Would the federal government tolerate a state directly selling a federally illegal substance? While private businesses operating in a legal gray area have been largely ignored by federal authorities, a state-run cannabis market would be a bold new step.
Would Republicans go along with expanding government control over a new industry? Many conservatives in Pennsylvania have long pushed for privatizing liquor sales—would they really support state-run cannabis stores?
Would this model create a government-controlled cannabis monopoly? Advocates for small businesses worry that this approach could limit opportunities for independent dispensaries and entrepreneurs.

For now, Pennsylvania lawmakers are debating whether to move forward with this unique approach or to follow more traditional legalization models seen in other states. If they succeed, Pennsylvania could set a new precedent for state-run cannabis markets—one that other states might follow.

Hawaii: A Long-Awaited Legalization Push

Another key battleground for cannabis legalization in 2025 is Hawaii. Despite its progressive reputation, Hawaii has lagged behind other blue states when it comes to recreational cannabis. While medical marijuana has been legal since 2000, previous efforts to expand legalization have stalled due to opposition from law enforcement and moderate Democrats.

However, momentum is shifting. A new wave of pro-cannabis legislators and strong public support are giving legalization a renewed push. In early 2025, a bill to legalize recreational cannabis was introduced in the state legislature with backing from key lawmakers. If passed, Hawaii could become the next state to embrace full legalization.

But legalization in Hawaii presents unique challenges:

Federal Land Issues: Much of Hawaii’s land is federally owned, which could complicate cannabis regulations.
Tourism and Public Consumption: With millions of tourists visiting Hawaii each year, lawmakers must decide how to regulate public consumption and prevent illegal sales to visitors.
Small Business vs. Big Cannabis: As seen in other states, there is an ongoing debate over whether to prioritize local growers and dispensaries or allow large multi-state cannabis corporations to dominate the market.

If Hawaii succeeds in legalizing recreational cannabis in 2025, it would mark a major step forward for legalization efforts in traditionally more hesitant states.

How Republican-Controlled Legislatures Are Shaping Cannabis Policy

One of the biggest hurdles for state-level legalization moving forward is the increasing power of Republican-controlled legislatures. While cannabis has gained bipartisan support in recent years, many conservative lawmakers remain opposed to full legalization. This is especially true in states where Republicans hold legislative majorities, making it difficult for new legalization bills to gain traction.

Some key trends to watch:

A Focus on Medical-Only Expansion: Some red states are willing to expand medical cannabis programs but remain resistant to recreational legalization.
Attempts to Roll Back Existing Laws: In some states, conservative lawmakers are pushing for tighter restrictions on cannabis sales, advertising, and THC potency limits.
Efforts to Block Federal Interference: In states where cannabis is already legal, Republican lawmakers are increasingly advocating for federal non-interference, emphasizing states’ rights over federal policy.

While state-level legalization has been the driving force behind the cannabis industry’s expansion, 2024 showed that progress is no longer guaranteed. Moving forward, advocates will need to navigate an increasingly complex political landscape, finding ways to work with—or around—Republican opposition in key states.

The Road Ahead: State-Led Legalization in an Uncertain Era

Despite setbacks in 2024, state-led cannabis legalization is still progressing—just at a slower and more unpredictable pace. With battleground states like Pennsylvania and Hawaii leading the charge, the next phase of legalization will likely depend on the ability of lawmakers to craft policies that appeal to both progressive advocates and conservative skeptics.

At the same time, the role of state legislatures is becoming more important than ever. As long as federal legalization remains elusive, individual states will continue to shape the industry’s future. The question now is whether legalization efforts can regain their momentum in the face of political uncertainty—or if the movement has reached its peak.

Big Cannabis, Social Equity, and the Industry’s Next Moves

If there’s one thing the cannabis industry has learned, it’s that legalization isn’t just about allowing people to light up legally—it’s about who profits, who gets left behind, and how the industry evolves under new regulations. While federal and state governments wrestle over cannabis policy, the real battle is unfolding between small businesses, massive multi-state operators (MSOs), and advocates fighting for social equity. As legalization spreads, will the industry become a free-market paradise or just another version of Big Tobacco, but with better branding?

The Rise of “Big Cannabis”: A Budding Monopoly?

Once upon a time, the legal cannabis industry was filled with scrappy entrepreneurs, homegrown dispensaries, and independent growers chasing the green dream. Fast forward to 2025, and the landscape is changing fast. A handful of MSOs—companies that operate across multiple states—are gobbling up licenses, dominating dispensary sales, and pushing out smaller businesses.

For those keeping score at home, this is how it usually plays out:

Step 1: States legalize cannabis, promising economic opportunity for all.
Step 2: Licensing fees, strict regulations, and high startup costs make it impossible for small businesses to compete.
Step 3: Large, well-funded cannabis corporations swoop in and take over.
Step 4: Local dispensary owners find themselves out of business, while the CEO of Big Buds, Inc. buys another yacht.

It’s a familiar story—one we’ve seen play out with alcohol, tobacco, and pharmaceuticals. Now, as cannabis becomes more mainstream, the same concerns are growing. Will a handful of corporations end up controlling the market, turning cannabis into the next highly regulated, billion-dollar industry with little room for independent operators?

Social Equity: The Promises vs. Reality

While many legalization efforts have included social equity provisions—meant to give opportunities to those impacted by the War on Drugs—progress has been slow. Minority entrepreneurs and small business owners often struggle to access capital, navigate licensing barriers, and compete with well-funded corporations.

Some states have attempted to level the playing field with social equity programs, which prioritize cannabis licenses for individuals from communities hit hardest by past drug laws. But so far, the results have been mixed:

In Illinois, social equity licenses were awarded, but many recipients struggled to open their businesses due to lack of funding.
In New York, lawsuits over licensing rules delayed dispensary openings for months.
In California, excessive regulations and local bans on dispensaries have made it nearly impossible for social equity businesses to succeed.

In short, states love to talk about social equity, but when it comes to actually implementing fair policies, the execution often leaves much to be desired. And with federal legalization still a distant dream, there’s no national framework in place to ensure real equity across the board.

The Rescheduling Effect: Boom or Bust for the Industry?

One of the biggest developments of 2025—the possible rescheduling of cannabis from Schedule I to Schedule III—could completely reshape the industry. But whether it’s a blessing or a bureaucratic nightmare depends on who you ask.

On one hand, rescheduling would allow cannabis businesses to finally deduct normal expenses on their taxes, saving them millions. It could also open the door for increased medical research, leading to new cannabis-based pharmaceuticals.

On the other hand, some fear that rescheduling could shift control of the cannabis industry to pharmaceutical companies. If marijuana is treated as a regulated prescription drug rather than a commercial product, will Big Pharma take over dispensaries? Will patients need a doctor’s note just to buy a joint?

Imagine walking into a CVS and seeing cannabis sold next to allergy meds: “For best results, ask your doctor if Granddaddy Purple is right for you.”

Jokes aside, rescheduling is likely to be a mixed bag—great for business operations, but potentially complicating the current dispensary model. For now, cannabis businesses are cautiously optimistic but keeping a close eye on how regulations evolve.

The Future of Federal Legalization: Are We There Yet?

With each passing year, full federal legalization feels both inevitable and impossibly far away—kind of like waiting for your Uber driver who’s been “5 minutes away” for the last half hour.

Despite growing public support, a divided Congress and conservative resistance make broad legalization unlikely in the near term. Instead, expect more piecemeal reforms, such as:

The continued push for the SAFER Banking Act, which would allow cannabis businesses access to banking services.
State-led legalization efforts, with states like Pennsylvania and Hawaii leading the charge.
Potential challenges to federal cannabis prohibition in the courts.

For now, the industry will continue operating in legal limbo—technically illegal under federal law, but thriving in state-regulated markets. The big question is whether the next four years under Trump will bring more clarity or just more confusion.

A Crossroads for Cannabis

The cannabis industry is at a major crossroads. With rescheduling on the horizon, state-led legalization efforts continuing, and Big Cannabis flexing its financial muscles, the next few years will shape the future of the industry.

For entrepreneurs, the message is clear: Adapt or get left behind. For advocates, the fight for social equity and fair regulations is more important than ever. And for consumers? Well, just sit back, roll one up (where legal, of course), and watch the drama unfold.

One thing’s for sure—whether it’s in Congress, state legislatures, or dispensary boardrooms, the battle over cannabis is far from over. Stay tuned, because the next chapter of legalization promises to be just as unpredictable as the last.