GOP State Attorneys General Oppose Trump Marijuana Rescheduling
What's happening
Republican state attorneys general are opposing President Trump’s plan to move cannabis from Schedule I to Schedule III, arguing the change could exceed executive authority and create legal uncertainty for state cannabis programs.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because political resistance could slow or complicate federal rescheduling and delay expected benefits such as tax relief and broader banking access. Banks, payment processors, and compliance software providers may remain cautious if federal policy remains contested. Equipment, logistics, and technology suppliers could see slower investment if operators wait for clearer federal direction.
What's happening
Shares of Canopy Growth Corporation have recently been volatile but are stabilizing as the company moves forward with a strategic acquisition of MTL Cannabis to strengthen its Canadian medical and adult-use business while the market reacts to potential U.S. regulatory changes including the federal rescheduling of cannabis, which has driven both investor optimism and sharp price swings.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because consolidation moves like acquiring MTL Cannabis signal ongoing market rationalization and offer opportunities for suppliers of cultivation, processing and packaging equipment as larger operators scale and standardize. Banking, compliance and POS software providers may see heightened demand as mixed regulatory signals — particularly around federal rescheduling — push operators to invest in stronger financial systems and compliance workflows. Meanwhile logistics and distribution partners should watch for shifts in product flows and inventory needs as larger multistate players expand their footprint and seek more integrated supply chains.
What's happening
The hemp industry is bracing for a major federal ban on most hemp-derived THC products after Congress included language in a 2025 spending bill that lowers the allowable total THC to 0.4 mg per container—a change that would effectively outlaw nearly all intoxicating hemp edibles, vapes and beverages by November 2026 and disrupt a multibillion-dollar market that has grown since the 2018 Farm Bill.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because the federal ban could shift consumer demand away from unregulated hemp THC products and toward state-licensed cannabis channels, affecting product portfolios and sales forecasts for suppliers, manufacturers and retailers. Banks, payment processors and compliance software providers may see changes in where and how operators need financial and regulatory systems as hemp products are phased out and regulated cannabis sales potentially increase. Cultivation equipment makers, packaging and extraction vendors, and logistics providers that have supported hemp-derived products could face reduced demand if the ban takes effect, but could also find new opportunity in the regulated market if demand migrates from banned hemp products to licensed cannabis offerings.
What's happening
A Michigan cannabis industry group has formally appealed a court decision allowing a 24 percent wholesale cannabis tax to take effect January 1, 2026, urging further legal action to block the levy and arguing it violates the state’s voter-approved legalization framework.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because the ongoing appeal creates continued uncertainty over tax costs that influence pricing, margins, and investment decisions across cultivation, processing, and retail operations. Banks, compliance and tax reporting software providers may see demand for tools and advisory services as operators prepare for multiple possible outcomes and adjust financial planning. Cultivation equipment makers, packaging suppliers and logistics partners could experience shifts in order timing or volume as operators manage cash flow and capital expenditures in response to the unsettled tax environment.
What's happening
NPR explains that President Trump’s executive order to reschedule marijuana from Schedule I to Schedule III would acknowledge medical use and trigger federal changes that could ease research barriers, improve banking access, and change tax treatment for cannabis businesses while leaving recreational cannabis still regulated at the state level.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because federal rescheduling could finally ease banking restrictions, allowing more mainstream financial services to work with operators and reducing reliance on cash. It also may improve tax treatment for state-legal operators, affecting investment and operating costs for cultivation, manufacturing, and retail partners. Compliance and POS software providers may see stronger demand as operators prepare systems to track new federal and state reporting requirements tied to the change.
What's happening
State cannabis regulators in Maine have expanded a major recall of adult-use cannabis vape cartridges made by NorCO Outdoor Cannabis after tests found unsafe levels of the pesticide chlorfenapyr in multiple strains sold at dozens of retail stores, and consumers are being urged to return or dispose of the affected products.
Why it matters to you
This matters to companies selling into licensed cannabis businesses because large-scale product recalls highlight ongoing regulatory and quality risks in the vape segment that can disrupt retailer inventories and consumer confidence. Compliance software firms, testing labs, and packaging vendors may see increased demand as operators tighten safety protocols, testing frequency, and tracking systems to prevent similar issues. Cultivation, extraction, and distribution partners could also face short-term volatility in orders and logistics as affected products are pulled and replacement stock is moved into retail channels, underscoring the importance of strong quality control across the supply chain.
What's happening
Rubicon Organics CEO Margaret Brodie reflected on 2025 as a transformative year for the cannabis industry, noting that the Canadian market has moved from survival to strategic growth with stronger operators remaining, highlighting trends such as declining flower sales but rising demand for pre-rolls and vapes, potential international opportunities especially in Europe and medical exports, and the need for disciplined execution and premium positioning as brands prepare for further consolidation and expansion in 2026.
Why it matters to you
Operators and suppliers should care because this perspective signals a broader shift in market dynamics where premium products and operational discipline are becoming key drivers of growth, affecting demand for cultivation, processing, packaging, and quality-focused equipment. Banks, compliance software firms, and POS providers may see continued interest as disciplined, growth-oriented operators invest in systems that support scaling and multi-jurisdiction operations under evolving regulatory environments. Logistics, distribution and retail support providers may also find opportunities as brands with strong positioning expand into new formats and markets, although slower segments like traditional flower may see reduced demand.