Trump Drug Czar Rejects Cannabis Rescheduling Despite DEA Review
New administration's drug policy chief dismisses ongoing federal marijuana reclassification efforts, signaling potential policy reversal
The Trump administration's newly appointed drug policy director has publicly dismissed the ongoing federal marijuana rescheduling process, declaring that cannabis "remains illegal" despite the DEA's ongoing review to move it from Schedule I to Schedule III. The statement represents the clearest signal yet that the new administration plans to reverse course on cannabis reform initiatives launched under the Biden presidency.
The rescheduling process, which began in 2022 following President Biden's directive to review marijuana's federal classification, had progressed through multiple regulatory stages and public comment periods. Moving cannabis to Schedule III would maintain federal prohibition while reducing criminal penalties and allowing state-licensed businesses to claim standard tax deductions currently blocked under Section 280E of the tax code. Cannabis companies have projected billions in annual tax savings from such a change.
Public cannabis operators face immediate uncertainty as the policy shift threatens to extend the current regulatory framework that has constrained industry growth. Major multi-state operators like Curaleaf, Green Thumb Industries, and Trulieve continue operating under state licenses while navigating federal banking restrictions and punitive tax treatment. The sector has struggled with profitability challenges partly attributed to the 280E tax burden, which prevents companies from deducting standard business expenses.
The drug czar's comments arrive as cannabis stocks trade near multi-year lows, with the AdvisorShares Pure US Cannabis ETF down over 60% from 2021 peaks. Institutional investors have largely avoided the sector due to federal illegality, limiting access to traditional capital markets and forcing companies to rely on expensive alternative financing. Any reversal of rescheduling momentum could further delay institutional participation and maintain current operational constraints.
Industry analysts now expect the Trump administration to prioritize enforcement over reform, potentially creating headwinds for expansion plans across state-legal markets. The policy stance contrasts sharply with growing public support for legalization and the economic success of state programs, which generated over $15 billion in legal sales during 2023. Cannabis companies must now navigate an extended period of federal prohibition while competing against illicit markets that benefit from the regulatory uncertainty.