Trump’s Second Term a Mixed Bag for the Cannabis Industry

Republican Donald Trump has been elected for a second term in office, but a red wave did not fully materialize. Opinions vary on what this means for the cannabis industry. On the campaign trail, Trump supported state-level legalization in Florida. Trump also hinted at potential federal cannabis reforms through banking or rescheduling. Many speculate that Trump will continue the current trajectory set forth by the Biden administration by pursuing incremental changes for the industry rather than full federal legalization.

Continuing The Push For Cannabis Rescheduling

The Biden administration’s decision to reschedule cannabis from Schedule I to Schedule III was a significant step in recognizing the changing tide in American culture. Rescheduling aims to expand research opportunities and provide cannabis businesses with fairer tax frameworks that do not include IRS Tax Code 280E. Throughout his campaign, Trump expressed a commitment to protecting adult access to cannabis, with a focus on advancing medical research.

The next step in cannabis rescheduling will be a public hearing on the matter – initially scheduled for December 6th, 2024, but postponed to 2025. On December 2nd, the DEA has a preliminary hearing to discuss which witnesses and parties (defined as “any person adversely affected or aggrieved by any rule or proposed rule issuable”) will have full standing to participate. It is unclear which groups will have full standing to participate, but many believe DEA Judge Mulroney will allow more parties to argue against rescheduling than in favor.

The Team Around The President

Cannabis industry leaders like David Culver of the U.S. Cannabis Council view the Trump administration as an opportunity for federal reform. During Trump’s first term, then-Attorney General Jeff Sessions notoriously rescinded Obama-era guidelines that allowed legal cannabis states some leeway with federal enforcement. Culver hopes that a second Trump term would involve more cannabis-friendly appointees, who may be open to furthering reform without outright legalization. Figures like Robert F. Kennedy Jr, nominated to head the H.H.S., and Susie Wiles, appointed as Trump’s chief of staff, signal that there might be a different tone in Trump’s approach this time. Kennedy has come out in favor of cannabis reform, and Wiles previously worked for Ballard Partners, a lobbying firm that represented Trulieve and pushed for the passing of Amendment 3 in Florida while she led President Trump’s re-election campaign.

Trump recently nominated Pat Bondi as Attorney General. Unlike former nominee Matt Gaetz, a vocal supporter of cannabis legalization, Bondi has a track record of opposing cannabis reform. As Florida’s Attorney General, Bondi challenged medical marijuana initiatives and upheld laws restricting cannabis use. Bondi’s appointment has raised concerns within the industry about how federal cannabis policy will be shaped. The difference in the appointees’ stance may indicate that cannabis policy is a lower-level priority for the incoming administration.

What Does It Mean?

Overall, industry supporters are cautiously optimistic about Trump’s return, with many expecting his business-friendly stance to ease regulatory burdens and provide growth opportunities. There is good reason to think Trump will protect the nearly 500,000 individuals that the industry employs. Real estate stakeholders also see opportunities in Trump’s broader agenda, which includes corporate tax cuts, a renewed push for Opportunity Zones, and a potential rollback on the $10,000 SALT cap. A more favorable regulatory environment for real estate could be on the horizon, boosting development.

While cannabis has proven to be a revenue powerhouse—delivering over $4 billion in tax revenue in 2023—opponents of legalization remain concerned about health impacts, the role of large corporations, and the need for improved regulatory standards. Trump’s interest in rescheduling aligns with these concerns, as it may pave the way for stricter safety regulations while respecting states’ rights to set their own policies.

Advocates hope rescheduling will create new opportunities for research, regulation, and business growth. A more explicit regulatory framework could empower states to respond to their communities’ needs while addressing safety and public health concerns. Should Trump pursue rescheduling, it could establish a national model that respects state authority, like alcohol regulation. This offers a sustainable path forward for cannabis legalization, balancing industry growth, job preservation, and public safety.

We hope this provided some clarity on how federal leadership changes might impact cannabis policy. With over 70% of Americans supporting cannabis reform, we remain optimistic that President-Elect Trump will recognize this widespread support and help create an environment that allows the cannabis industry to thrive.

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