White House Push to Reschedule Cannabis Meets Safety Pushback — What Investors Need to Know Now

A fast-track rescheduling order lands with a safety sting

The White House has issued an executive order directing federal agencies to speed up a review of marijuana’s classification under the Controlled Substances Act. The move immediately lifted political uncertainty for the cannabis industry, but the National Safety Council responded with a public statement demanding tough safety guards — on impaired driving, workplace rules, data collection and public education. For markets, that sets up a classic tradeoff: the prospect of major regulatory relief that could unlock banking, research and pharma deals, paired with potential constraints tied to safety and implementation that may slow consumer-facing growth.

How a federal rescheduling would actually work — agencies, steps and likely timing

Under existing law, rescheduling a drug is a federal process that moves through scientific review then rulemaking. Health and science agencies deliver the first judgment: the Department of Health and Human Services typically evaluates medical and scientific evidence and gives the Drug Enforcement Administration guidance. The DEA then starts rulemaking to change the substance’s schedule — a process that can involve public notice and comment and may take many months.

An executive order cannot rewrite the law, but it can push agencies to prioritize reviews and compress timelines. Expect officials at HHS, the Food and Drug Administration and the DEA to be told to speed up assessments, and the Justice Department to coordinate enforcement guidance. That said, scientific reviews, safety studies and formal rulemaking usually do not move overnight. Even with an expedited track, a complete rescheduling or de-scheduling could realistically take many months and possibly over a year, depending on the scope of required studies and any legal challenges.

Market consequences: which sectors could reprice if cannabis is rescheduled?

Rescheduling would change the investment landscape in several ways. The most obvious near-term reaction is sentiment-driven: stocks and ETFs tied to cannabis could spike on a clearer federal path. Beyond that, the concrete channels that would lift company value are:

• Banking and payments: If marijuana is no longer Schedule I, banks would face lower legal risk in serving cannabis businesses. That would cut compliance costs and could unlock credit lines. Expect banks and card processors to sit on the sidelines until regulators issue clear supervisory guidance.
• Research and drug approvals: Easier access to federal research grants and clinical trials would attract pharmaceutical investment into cannabinoids. Big pharma collaborations and licensed prescription products would be a mid-term catalyst.
• Tax and accounting rules: Federal tax rules like the infamous Section 280E, which blocks certain cost deductions for businesses dealing with controlled substances, hinge on federal scheduling. If cannabis is de-scheduled, 280E would no longer apply — a major margin tailwind. If cannabis is merely moved to a lower schedule, 280E may still bite.
• Interstate commerce and supply chains: Rescheduling could ease cross-state shipment and national branding, helping larger multi-state operators scale faster. That benefits vertically integrated companies and REITs that own cannabis facilities.

But the National Safety Council’s demands — strict impairment rules, mandatory education and new testing standards — point to regulatory conditions that could limit advertising, set potency ceilings, complicate workplace staffing and require capital spend on compliance. Those measures would blunt upside for consumer-facing retailers and could create winners among compliance, testing and training providers.

Winners, losers and names investors should watch

Not every public cannabis name would respond the same way. Real estate REITs such as Innovative Industrial Properties (IIPR) are positioned to benefit from clearer property rights and easier access to traditional financing. Large multi-state operators — Curaleaf (CURLF), Green Thumb (GTBIF), Cresco Labs (CRLBF) and Trulieve (TCNNF) — stand to gain from banking access and ability to scale interstate. Canadian LPs with U.S. ambitions, like Canopy Growth (CGC) and Tilray Brands (TLRY), would be ones to watch for pharma partnerships and consumer brand plays.

Exchange-traded funds such as the ETFMG Alternative Harvest ETF (MJ) and AdvisorShares MSOS (MSOS) offer easier, diversified exposure if single stocks remain volatile. Testing labs, compliance platforms and manufacturers of workplace testing tools would pick up demand if NSC-style rules are implemented.

Short actionable watchlist items for investors: upcoming quarterly reports for the MSOs (earnings can reset sentiment), any public HHS or DEA timelines released after the order, comment periods for proposed rules, IRS guidance on 280E, and public-private partnership announcements between pharma and cannabis firms.

Safety pushback: what the National Safety Council wants and why that matters

The National Safety Council’s statement focuses on preventing impairment on the roads and workplace, demanding strong testing protocols, mandatory training, and clear public education campaigns. In practice, that could mean stricter workplace drug-testing rules, state or federal impairment standards for driving, and mandatory labeling and potency caps for retail products. Those measures would protect public safety but also raise operating costs and could slow product rollouts.

Importantly, safety-focused rulemaking can be granular and prescriptive. If federal regulators adopt NSC-style conditions, companies will face additional compliance overhead: new testing equipment, employee-training programs, and changes to product formulas or packaging. Those are short-term headwinds but also create recurring revenue opportunities for firms that sell compliance services and testing technology.

What investors should do next: risks to monitor and tactical considerations

Rescheduling is a big potential structural win for the cannabis industry, but it is not a free pass. Expect volatility. Near term, policy headlines will move prices; medium term, regulatory details will drive durable value. Here are pragmatic moves investors and portfolio managers should consider now:

• Track regulatory milestones: watch for HHS/DEA announcements, formal rule proposals, and the opening and close of comment periods.
• Follow tax and banking signals: IRS guidance on 280E and any federal banking agency guidance are critical value drivers.
• Favor diversified exposure if you lack high conviction: ETFs and large REITs may smooth the binary risk that attaches to single MSOs.
• Price in safety-condition risk: if the NSC’s preferences are adopted, expect a drag on retail growth and higher compliance capex; that should be in valuations.
• Be prepared for headline-driven swings: tradeable opportunities will appear around earnings and regulatory updates, but don’t mistake a short-term spike for permanent deregulation.

In short, the executive order starts a meaningful process that could reshape the industry. But the NSC’s public push shows the next phase will likely be a months-long mix of scientific review, rulemaking and safety-focused negotiation — a period that will reward investors who follow timelines and focus on companies positioned to benefit from clearer rules and those that can meet tougher compliance demands.

Sources

• prnewswire.com