President Donald Trump has issued an executive order to reclassify marijuana, a significant move that is expected to impact Colorado’s struggling cannabis and CBD markets. The order directs the Attorney General to initiate the process of moving marijuana from Schedule I to Schedule III under the Controlled Substances Act. This change may relieve some financial pressures on cannabis businesses by reducing their tax burden and improving access to banking services.
The Colorado cannabis sector has faced declining sales for over five years, as reported by the state Department of Revenue. Despite optimism surrounding the executive order, many industry leaders, including Chuck Smith, CEO of Colorado Leads, caution that this change alone will not resolve the myriad challenges facing marijuana businesses. Smith remarked, “Reclassifying cannabis under Schedule III will alleviate the unfair federal tax burden and lack of access to banking services that cannabis businesses have shouldered for years.”
Potential Impacts on Financial and Regulatory Landscape
Currently, cannabis businesses face federal tax rates as high as 70 percent due to their classification as Schedule I substances. A move to Schedule III could open doors for increased investment and financial partnerships. Smith added that this classification is an important step, yet more reforms are necessary, particularly regarding criminal justice implications tied to cannabis prohibition.
Concerns about the implications of the order have also emerged. Advocacy group One Chance to Grow Up expressed apprehension that reclassifying marijuana might send a misleading message about its safety, especially to younger audiences. The group emphasizes the need for stringent product safety regulations to protect children and maintain standards in a rapidly evolving market.
In parallel with the executive order, the Centers for Medicare & Medicaid Services is exploring options to allow approved CBD treatments under their coverage plans. Charlotte’s Web, a notable Colorado-based CBD company, announced plans to support senior oncology patients with science-backed CBD products, enhancing accessibility for this vulnerable demographic. The company aims to roll out its services through an online healthcare portal by early 2026.
Mixed Reactions and Future Considerations
While many in the cannabis community celebrate the potential for increased access and research, there is a palpable concern that federal involvement may lead to corporate domination of the cannabis market. Advocates worry that pharmaceutical companies could monopolize the benefits of cannabis products, sidelining smaller businesses that have traditionally served the community.
The executive order also raises questions about the future of hemp products, particularly CBD and full-spectrum products, which could face restrictions from Congress. The order advocates for collaboration with Congress to update the statutory definitions of hemp-derived products while preserving safeguards to protect consumers.
As Colorado navigates these changes, the implications of Trump’s executive order may reshape the cannabis landscape, potentially improving financial conditions for businesses while also necessitating ongoing discussions about health, safety, and regulation in the cannabis industry. The road ahead remains complex, but the executive order marks a noteworthy shift in the federal approach to cannabis regulation.
