The cannabis world is buzzing after President Trump's executive order directing the DOJ to move marijuana from Schedule I to Schedule III. While the announcement sent shockwaves through the industry, the reactions from operators, regulators, researchers, and advocacy groups reveal a more complex picture. Here is the latest roundup of how key players are responding.
MSO and Operator Reactions: Relief, Caution, and Strategic Positioning
Large multi-state operators (MSOs) were among the first to respond, and their tone has been a mix of optimism and realism. Many executives praised the potential end of 280E taxation, calling it "transformational" for cash flow and reinvestment. Several operators noted that Schedule III could free up millions in annual operating capital, allowing for expansion, hiring, and product development.
However, the excitement is tempered by uncertainty. Operators acknowledge that Schedule III status may introduce FDA oversight, pharmaceutical-grade compliance requirements, and new regulatory burdens that smaller businesses may struggle to meet. Many leaders emphasized that the executive order is only the first step, and the DOJ and DEA still need to complete the formal rescheduling process.
Small Business and Independent Operator Responses
Independent dispensaries and craft growers expressed cautious optimism. The potential removal of 280E is widely celebrated, but many small operators worry that Schedule III could accelerate consolidation. If FDA-style compliance becomes mandatory, smaller businesses may face higher costs for testing, documentation, and manufacturing standards.
Some operators also voiced concerns that rescheduling without banking reform leaves them stuck in the same cash-heavy environment, with no relief from compliance burdens or financial risk.
Regulators and Policy Experts: "This Is Not Legalization"
State regulators and policy analysts have been quick to clarify what the executive order does not do. Members of the Cannabis Regulators Association (CANNRA) stressed that rescheduling does not legalize state markets, does not authorize interstate commerce, and does not change federal enforcement authority.
Regulators also highlighted that the DOJ must still initiate and complete a formal rulemaking process. Until that happens, cannabis remains a Schedule I substance under federal law. Several experts warned that the timeline could stretch into late 2026 or beyond, depending on how aggressively the DOJ moves.
Medical and Scientific Community: A Long-Awaited Opening
Researchers and medical organizations responded with enthusiasm. Many have spent years calling for easier access to cannabis for clinical studies, and Schedule III could finally remove the barriers that have slowed scientific progress.
Medical groups noted that rescheduling would allow universities and research institutions to study real-world cannabis products instead of relying on limited federal supply. Experts expect a surge in clinical trials focused on chronic pain, PTSD, epilepsy, and the effects of high-potency THC products.
Still, researchers cautioned that meaningful progress depends on how quickly the DOJ and DEA implement the change, and whether the FDA chooses to regulate cannabis-derived products more aggressively.
Advocacy Groups: Split Between Celebration and Skepticism
Pro-cannabis advocacy groups largely celebrated the announcement as a historic milestone. Many highlighted the potential benefits for veterans, chronic pain patients, and seniors who may gain access to federally recognized cannabis therapies.
However, some reform organizations criticized the move as insufficient. They argue that rescheduling does not address criminal justice issues, expungement, or the harms caused by decades of prohibition. Several groups reiterated their call for full descheduling and federal legalization.
Anti-cannabis organizations, meanwhile, expressed concern that rescheduling could normalize cannabis use and increase youth exposure. Some groups signaled plans to challenge the move during the rulemaking process.
Financial Analysts and Market Observers
Analysts described the market reaction as a "whiplash moment." Stocks surged immediately after the announcement, only to fall sharply once investors realized that Schedule III does not automatically grant banking access, exchange uplisting, or federal legalization.
Financial experts emphasized that the biggest near-term impact is the potential removal of 280E, but warned that the industry should not expect rapid regulatory clarity. Many analysts expect volatility to continue until the DOJ provides concrete updates.
What Happens Next
The cannabis industry is united on one point: this is a historic moment, but the real work begins now. The DOJ must initiate formal rulemaking, the DEA must evaluate the scientific and medical evidence, and the FDA may step into a more active regulatory role.
Until those steps unfold, the industry remains in a holding pattern. Operators, researchers, and advocates are watching closely for the next official update from the DOJ.
For a full breakdown of the executive order and what it does and doesn't change, revisit our December 18th article: Trump's Historic Cannabis Executive Order.
