Trump Relaxes Pot Laws
In a significant shift in US cannabis policy, President Donald Trump has signed an executive order that directs federal agencies to reclassify marijuana. This move will loosen the long-standing restrictions on the drug, marking the most substantial change in over 50 years. The order instructs the Drug Enforcement Administration to move cannabis from a Schedule I classification to a Schedule III classification, which is a less restrictive category.
This reclassification is expected to have a profound impact on the cannabis industry, as it will allow companies to deduct standard expenses like rent and payroll for the first time. Additionally, it will open up access to banking and institutional capital, which has been previously limited due to compliance concerns. The move is also expected to draw in major pharmaceutical players, who will be attracted to the federally insured revenue streams.
On the same day, the Centers for Medicare and Medicaid Services, led by Dr. Mehmet Oz, announced plans to launch a pilot program in April. This program will enable certain Medicare-covered seniors to receive free, doctor-recommended CBD products, as long as they comply with local and state laws on quality and safety. The products must also undergo third-party testing for CBD levels and contaminants.
The reaction from the cannabis industry has been mixed, with some companies seeing a surge in stock prices, while others have experienced a decline. However, many analysts view this move as a financial lifeline for the industry, which has been struggling with restrictive regulations. Ben Kovler, CEO and founder of Green Thumb, commended the administration for taking this historic step, stating that it is only the beginning.
While the FDA has stopped short of granting full backing to CBD, it has approved one CBD-based medication, Epidiolex, for rare forms of epilepsy. Studies have found inconsistent benefits for targeted conditions, and FDA-funded research has warned of potential liver toxicity and interference with other life-saving medications. Despite this, the popularity of CBD-infused consumer goods has surged in recent years, with products ranging from seltzers to skincare.
President Trump emphasized that the order does not legalize marijuana in any way, shape, or form, and does not sanction its use as a recreational drug. The move is seen as a significant step forward for the cannabis industry, and it will be interesting to see how it unfolds in the coming month
