The marijuana business is growing up

Published: Monday, January 19, 2026 at 11:41 pm

Marijuana Industry Awaits Potential Financial Relief Under Trump Executive Order

The cannabis industry, a burgeoning sector valued at $30 billion, is poised for potential financial restructuring following a recent executive order by President Donald Trump. The order, which aims to reschedule marijuana from Schedule I to Schedule III, could alleviate significant financial burdens that have long plagued the industry.

The primary impact of rescheduling lies in tax reform. Currently, cannabis businesses are subject to punitive tax rates, often between 60% and 90%, due to Section 280E of the tax code. This provision, stemming from marijuana's classification alongside substances like heroin, prevents businesses from deducting ordinary expenses. Rescheduling would eliminate this tax burden, freeing up capital for expansion, hiring, and research.

Beyond taxes, rescheduling could integrate the industry into the mainstream financial system. The current legal status forces dispensaries to operate primarily as cash businesses, leading to security risks and hindering access to loans. Rescheduling could pave the way for payment processors and traditional lenders to enter the market without fear of prosecution, offering a more stable and secure financial environment.

Despite the potential benefits, the initial market reaction to the executive order was negative, with cannabis stocks declining. This reflects a degree of skepticism among investors who have witnessed previous promises of legalization stall. The order's implementation still faces hurdles, including potential legal challenges and the need for Justice Department action. It also doesn't address issues like interstate commerce or access to stock exchanges.

However, the industry's fundamentals suggest a shift. The sector employs over 400,000 people and generates substantial tax revenue in states where it is legal. Furthermore, the President has demonstrated a willingness to support industries previously excluded from traditional financial systems.

BNN's Perspective: While the executive order offers a promising step towards financial stability for the cannabis industry, it's crucial to acknowledge the remaining challenges. The potential for legal battles and the need for further regulatory clarity underscore the complexity of this evolving landscape. The industry's future hinges on the successful implementation of the order and the ability to navigate the remaining obstacles.

Keywords: marijuana, cannabis, rescheduling, executive order, taxes, Section 280E, financial system, dispensaries, cash businesses, Trump, legalization, industry, stock prices, investment, regulation, finance, business, legal, market, revenue.

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