2025 could be a year of transformation for the cannabis industry.
With the potential rescheduling of cannabis on the horizon, a new era of opportunity awaits.
However, the industry faces key challenges that must be addressed to realize this potential fully.
Here, the Investing News Network will examine emerging trends expected to shape the cannabis market in this critical year.
A shift in federal drug policy could be on the horizon for the cannabis industry if it is rescheduled from a Schedule I to a Schedule III substance in 2025.
If successful, this move has the potential to significantly benefit cannabis businesses by removing barriers to essential services like banking and patent protection. However, the process has encountered delays and is now not expected to be finalized until late 2025.
The outlook for cannabis reform, once seemingly straightforward, is now uncertain, particularly regarding the timing and likelihood of rescheduling.
Kim Anzarut, CEO and founder of Allay Consulting, replied “With Trump’s re-election, Trump might continue to leave cannabis policy largely to the states but could lean toward rescheduling if it proves to be a popular move that aligns with GOP support for states’ rights.”
Anzarut continued: “On the other hand, new leadership could prioritize rescheduling or even push for full legalization to align with social equity and justice reform efforts. Either way, the FDA and DEA are being directed to reevaluate cannabis’ current status, which will set the stage for the inevitable regulatory overhaul.”
David Vaillencourt, founder and CEO of The GMP Collective, chairman of S3 Collective and Vice-Chair of ASTM International Committee D37 on Cannabis Standards, also expressed his thoughts: “Trying to forecast what a Trump administration might do is like picking stocks based on a fortune cookie: amusing but unreliable.”
“That said, there is reason for cautious optimism. Trump’s pick for Secretary of Health and Human Services – assuming he is confirmed by the Senate – Robert F. Kennedy Jr. supports natural medicine and criticizes the FDA’s rigidness. Additionally, we saw Trump endorse Florida’s Amendment 3 to legalize adult-use cannabis. Whether this signals a genuine shift or a strategic move to outmaneuver (Ron) DeSantis is anyone’s guess,” he added.
If rescheduling is successful, it would also remove the trigger for the Internal Revenue Service tax code 280E to apply, which prevents cannabis business owners from deducting regular business expenses.
Some of the changes proposed in June include simplifying licensing, production and security clearance requirements, increasing production limits for “micro-cultivators” and making it easier for licensees to submit required reports to Health Canada. Comments submitted by the public are currently under review.
This upward trajectory will be fueled by legalization efforts, new market entrants and product innovation.
Market consolidation is set to continue in 2025, and mergers and acquisitions will create opportunities for both established players and emerging companies to expand market share and access new resources.
This potential shift could impact the regulation of CBD and other hemp-derived cannabinoids, creating both opportunities and challenges for hemp businesses as they adapt to changes.
As the cannabis industry continues to mature, these and other companies will be battling for dominance in a rapidly evolving market.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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