Greenway Magazine
In a historic move, the White House issued an executive order Thursday to move forward with rescheduling cannabis under the Controlled Substances Act from Schedule I (high potential for abuse, no known medical use) to Schedule III (lower incidence of physical abuse, but higher incidence of psychological dependence). This executive order reinvigorates the Biden administration’s effort, launched in 2024, that has been on hold for much of 2025.
The scope of the unknowns around the timing, impetus, and effect of this executive order match the volume of speculation.
There is a process for rescheduling that must be followed, inasmuch as any governmental process has been followed this year. There will be hearings and rulemaking, a potential Office of Management and Budget review, all of which take time.
There will be litigation and threats of litigation. Measuring this timeline in months is probably safe. It is probably also safe to assume that an announcement to reschedule might be accelerated or slowed to affect midterm elections.
What is most known about rescheduling is an end to 280E taxes. Internal Revenue Code Sec. 280E considers plant-touching operators to be traffickers of a Schedule I controlled substance and requires that taxes be levied on income less cost of goods produced or sold, without deducting administrative, selling, and other general business expenses. Code Section 280E applies to Schedule I and II drugs, so with a rescheduling to Schedule III, cannabis businesses can deduct all ordinary and necessary business expenses like any other business.
For this, I am extremely excited.
In the few years of Missouri’s legal market, I have met so many hardworking, risk-taking, creative, thoughtful business owners who struggle with the weight of the additional 280E taxes, which time and again require substantial federal income tax payments even in years posting losses. I will be thrilled to see the cash needed to pay these excessive tax bills be available to address other areas of risk, need, and growth in Missouri’s licensed enterprises.
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What does marijuana rescheduling mean for 280E and when will it happen?
