New York City, December 20, 2025
The cannabis industry anticipates significant growth following President Trump’s executive order to reclassify marijuana to Schedule III. This shift eases regulatory burdens, boosts medical research, and offers tax relief for cannabis businesses. While recreational use remains illegal federally, the reclassification paves the way for innovation and investment in a sector long hindered by restrictions, promising to invigorate local economies and expand market opportunities for entrepreneurs.
Reclassifying Marijuana: A New Era for Cannabis Businesses
With President Trump’s executive order, the cannabis industry anticipates growth and innovation.
New York, NY – On December 18, 2025, President Donald Trump signed an executive order to reclassify marijuana from a Schedule I to a Schedule III substance under federal law. This significant policy shift aims to facilitate medical research and provide tax relief to cannabis businesses, though it does not legalize recreational use at the federal level. The move represents a pivotal moment for an industry that has long faced regulatory hurdles, signaling a potential new era of growth and innovation.
Entrepreneurs in the cannabis sector are poised to benefit from reduced regulatory burdens that could unfurl new avenues for creativity and investment. As the nation increasingly embraces the therapeutic use of cannabis, this change in classification reflects a broader trend towards smarter regulations that promote economic opportunity.
Impact on Medical Research
Reclassifying marijuana to Schedule III, a category that includes substances like ketamine and certain anabolic steroids, is expected to ease regulatory barriers for medical research. With this new classification, researchers anticipate improved access to cannabis for clinical studies, potentially accelerating the development of cannabis-based medical treatments. This change may also invigorate the research community to undertake more comprehensive studies evaluating the drug’s therapeutic benefits and safety profile.
Financial Implications for Cannabis Businesses
Currently, cannabis businesses are subjected to Section 280E of the U.S. tax code, which prohibits them from deducting ordinary business expenses due to marijuana’s Schedule I status. Reclassification to Schedule III would allow these businesses to claim standard tax deductions, potentially saving the industry billions of dollars annually. This financial relief could lead to more competitive consumer prices and increased investment in the sector, enabling local entrepreneurs to expand their operations and contribute further to New York’s economy.
Industry Reactions
While the executive order has been hailed as a transformative policy shift, some cannabis companies experienced short-term stock price fluctuations following the announcement. For instance, Tilray Brands Inc. saw a 4.2% decrease, and Canopy Growth Corporation experienced a 12.5% drop. Despite these immediate declines, the long-term outlook for the industry is optimistic, with expectations of growth and heightened legitimacy drawing interest from investors.
Background
Marijuana’s Schedule I classification has long been a point of contention, hindering research and imposing financial burdens on businesses. By reclassifying marijuana, the federal government is signaling a shift in drug policy that aligns with growing public support for medical cannabis research and its potential therapeutic applications. It is essential to note that this reclassification does not alter current federal penalties for recreational marijuana use or manufacturing without FDA approval.
Considering the Future of the Cannabis Industry
The reclassification of marijuana to Schedule III is not only a pivotal moment for medical research but also sets the stage for increased legitimacy and growth in the cannabis sector. As businesses gain financial advantages and access to new markets, the industry could significantly contribute to economic development. As entrepreneurs and investors capitalize on these changes, communities may experience job creation and enriched local economies driven by small-business innovation.
Conclusion
President Trump’s executive order to reclassify marijuana marks a significant step towards nurturing an industry ripe with entrepreneurial potential. By lowering regulatory barriers and providing substantial financial relief for cannabis businesses, this policy change can foster an environment where innovation thrives. Community members are encouraged to stay engaged and support local businesses as New York’s cannabis industry continues to evolve and contribute to the state’s economic future.
Frequently Asked Questions (FAQ)
What does the reclassification of marijuana to Schedule III mean?
The reclassification means that marijuana is now considered to have a moderate to low potential for abuse, similar to substances like ketamine and certain anabolic steroids. This change aims to facilitate medical research and provide tax relief to cannabis businesses.
How will this affect medical research on cannabis?
Researchers anticipate improved access to cannabis for clinical studies, potentially accelerating the development of cannabis-based medical treatments and leading to more comprehensive studies on the drug’s therapeutic benefits and safety profile.
What financial benefits will cannabis businesses experience?
Businesses will now be able to claim standard tax deductions, potentially saving the industry billions of dollars annually. This financial relief could lead to lower consumer prices and increased investment in the sector.
Does this reclassification legalize recreational marijuana use?
No, the reclassification does not legalize recreational marijuana use at the federal level. It only affects the classification of marijuana for medical and business purposes.
What are the potential long-term effects on the cannabis industry?
The reclassification is expected to lead to industry growth, increased legitimacy, and more investment opportunities, despite initial stock price fluctuations following the announcement.
Key Features of the Reclassification
| Feature | Description |
|---|---|
| Reclassification to Schedule III | Marijuana is now considered to have a moderate to low potential for abuse, similar to substances like ketamine and certain anabolic steroids. |
| Impact on Medical Research | Improved access to cannabis for clinical studies, potentially accelerating the development of cannabis-based medical treatments and leading to more comprehensive studies on the drug’s therapeutic benefits and safety profile. |
| Financial Implications for Businesses | Businesses can now claim standard tax deductions, potentially saving the industry billions of dollars annually, leading to lower consumer prices and increased investment in the sector. |
| Recreational Use | The reclassification does not legalize recreational marijuana use at the federal level; it only affects the classification of marijuana for medical and business purposes. |
| Industry Outlook | The reclassification is expected to lead to industry growth, increased legitimacy, and more investment opportunities, despite initial stock price fluctuations following the announcement. |
Now Happening on X
- @NYBizJournal (December 20, 2025): New York City’s economy remains strong despite national economic trends heading southward, according to New York City Economic Development Corp. View on X
- @YieldCurveBalI (December 20, 2025): Excellent article describing NYC’s current economic position, essential for understanding or familiarizing with the city. View on X
- @KRGulock (December 16, 2025): At ICSC New York, the commercial real estate vibe is optimistic yet disciplined, with resilient retail fundamentals despite challenges, and benefits from Fed rate cuts. View on X
- @ProducerCities (December 16, 2025): The 2025 State of the City’s Economy report notes NYC’s office market rebound gaining steam, though vacant space overhang persists. View on X
- @NYBizJournal (December 17, 2025): New York City’s economy continues to show strength amid downward national trends, per the Economic Development Corp. View on X
- @REBusiness (December 15, 2025): A partnership secures $213M in financing for a Brooklyn mixed-use development project. View on X
- @Colliers_HOU (December 14, 2025): ICSC New York 2025 highlights cautious optimism in retail real estate amid higher construction costs and economic uncertainty. View on X
Deeper Dive: News & Info About This Topic
HERE Resources
President Trump’s Executive Order: A New Era for Cannabis Businesses
Author: STAFF HERE NEW YORK WRITER
The NEW YORK STAFF WRITER represents the experienced team at HERENewYork.com, your go-to source for actionable local news and information in New York, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
