Cannabis in United States

The United States has the world's largest cannabis market by revenue, estimated at over $30 billion annually across state-legal programs, yet cannabis remains federally classified as a controlled substance. This creates a uniquely complex regulatory environment where cannabis is simultaneously legal under the laws of most states and illegal under federal law.

As of 2026, 24 states plus the District of Columbia have legalized recreational cannabis, while 38 states have medical cannabis programs. The state-legal industry supports hundreds of thousands of jobs and generates billions in tax revenue. However, federal prohibition creates significant challenges including limited banking access, inability to deduct normal business expenses under Section 280E of the Internal Revenue Code, and barriers to interstate commerce.

The US cannabis market is dominated by multi-state operators (MSOs) — vertically integrated companies that hold licenses across multiple states. Leading MSOs including Curaleaf, Green Thumb Industries, Trulieve, Cresco Labs, and Verano Holdings are publicly traded on the Canadian Securities Exchange and US OTC markets, as federal prohibition prevents listing on major US exchanges like NASDAQ and NYSE.

The DEA's 2025 final rule reclassifying cannabis from Schedule I to Schedule III represented the most significant federal policy shift in decades. While not full legalization, the reclassification eliminated the Section 280E tax burden and opened pathways for research and banking reform. The cannabis industry continues to push for comprehensive federal legislation that would enable interstate commerce, major exchange listings, and institutional investment.