Cannabis Rescheduling: What Is Actually Changing and What Business Owners Should Not Assume (Cannabis rescheduling business impact)

Cannabis is once again the subject of serious federal attention, and many business owners are hearing the word “rescheduling” without clear explanation of what that does or does not mean. As with many regulatory developments, the headlines move faster than the law.

Over the past year, I have spoken with business owners, investors, and executives who believe federal legalization is imminent, that long-standing tax barriers are about to disappear, or that banking access will suddenly become routine. Those assumptions are understandable, but they are not yet grounded in the current legal reality.

As a business attorney licensed in Pennsylvania and New York, Todd Nurick of Nurick Law Group advises companies that are directly involved in cannabis, adjacent to the industry, or simply managing employment, compliance, and transaction risk affected by cannabis laws. In each case, the analysis starts with separating discussion from enforceable law.

Where Federal Law Stands Today

In 2024, the U.S. Department of Health and Human Services formally recommended that marijuana be moved from Schedule I to Schedule III under the Controlled Substances Act. In 2025, executive action directed the Department of Justice and the Drug Enforcement Administration to continue and complete the administrative rulemaking process.

That distinction matters. Executive direction does not itself reschedule marijuana. Under federal law, a change in scheduling becomes effective only after the DEA completes notice-and-comment rulemaking and issues a final rule. Until that process is completed, marijuana remains a Schedule I substance under federal law.

For business planning purposes, that means companies must operate based on the law as it exists today, not on where it may eventually land.

What Rescheduling Would Mean and What It Would Not (Cannabis rescheduling business impact)

Rescheduling is not legalization.

If marijuana is ultimately moved to Schedule III, it would reflect a federal acknowledgment of accepted medical use and a lower abuse potential than Schedule I. It would not legalize recreational cannabis nationwide. It would not override state licensing regimes. It would not eliminate state enforcement authority or local control.

State law would continue to determine who may operate, what licenses are required, how products may be marketed, and how compliance is enforced.

The Tax Issue That Draws the Most Attention

One of the most significant potential consequences of rescheduling involves federal taxation.

Internal Revenue Code Section 280E disallows ordinary business deductions for businesses that traffic in Schedule I or Schedule II controlled substances. That provision is the reason many cannabis operators face unusually high effective federal tax rates.

If marijuana is moved to Schedule III, Section 280E would no longer apply to marijuana businesses. That change would materially affect cash flow, valuation, and transaction structuring.

A common misunderstanding I see is the belief that tax relief follows immediately once rescheduling is announced. It does not. Section 280E remains in force until a final scheduling rule takes effect. Until then, businesses should plan conservatively and model multiple outcomes.

Banking and Payments Remain a Separate Analysis

Even with rescheduling, banking access is not automatic.

Financial institutions remain subject to anti-money-laundering obligations, suspicious activity reporting expectations, and regulator oversight. Many banks will continue to evaluate cannabis-related customers based on internal risk tolerance and compliance frameworks rather than scheduling alone.

Rescheduling may reduce perceived risk for some institutions, but it does not require banks to provide services. Businesses should expect gradual change, not immediate normalization.

Pennsylvania: Federal Movement Does Not Replace State Law

Pennsylvania currently operates a regulated medical marijuana program. Adult-use legalization remains a legislative issue and has not been enacted as of this writing.

For Pennsylvania businesses, a federal scheduling change would not eliminate the need for state licenses, regulatory compliance, advertising restrictions, or local approvals. Operating outside Pennsylvania’s statutory framework would remain unlawful regardless of federal developments.

It is also worth noting that businesses with no involvement in cannabis sales can still face exposure through employment policies, workplace safety issues, or contractual relationships.

New York: Legalization Exists, Compliance Still Controls

New York legalized adult-use cannabis through the Marijuana Regulation and Taxation Act. Businesses operating in New York already function within a complex regulatory environment.

Rescheduling could influence tax treatment, investor interest, and financing structures, but it does not reduce New York’s licensing obligations or enforcement authority. Compliance remains a central business concern.

Employment Policies Affect All Businesses

Cannabis law is not just a cannabis-industry issue.

Employers in Pennsylvania and New York must carefully manage policies addressing impairment, safety-sensitive roles, testing, company vehicles, and remote work. Rescheduling does not eliminate an employer’s obligation to maintain a safe workplace or comply with state employment laws.

Outdated or inconsistent policies are a frequent source of disputes, even for businesses that never touch cannabis products.

Transactions, Contracts, and Diligence Considerations

Cannabis exposure increasingly appears in mergers and acquisitions, financing arrangements, and commercial contracts. Buyers and lenders often scrutinize whether a business has direct or indirect cannabis involvement through customers, affiliates, marketing practices, or workforce conduct.

Rescheduling discussions are already influencing representations, warranties, disclosure schedules, and closing conditions. Even if rescheduling becomes final, diligence will remain essential.

Assumptions That Commonly Create Problems

There are a few assumptions I see repeatedly, and they tend to cause issues:

• Treating rescheduling as legalization

• Assuming immediate tax relief

• Expecting automatic banking access

• Overlooking state law requirements

• Ignoring employment policy implications

• Failing to identify cannabis exposure in transactions

Each of these can create avoidable legal and financial risk.

Final Thoughts

Federal cannabis rescheduling is closer than it has ever been, but it is not final. Business owners should resist the urge to plan around headlines and instead focus on the law as it exists today while preparing for possible change.

Todd Nurick and Nurick Law Group advise businesses in Pennsylvania, New York, and nationally on how cannabis developments affect governance, taxation, employment policies, transactions, and overall risk management.

This article is for informational purposes only and is not legal advice. Reading it does not create an attorney–client relationship. Todd Nurick and Nurick Law Group are not your attorneys unless and until there is a fully executed written fee agreement with Todd Nurick or Nurick Law Group.

Sources

Controlled Substances Act, 21 U.S.C. §§ 801 et seq.

Internal Revenue Code § 280EU.S. Department of Health and Human Services recommendation on marijuana scheduling (2024)

U.S. Department of Justice and Drug Enforcement Administration proposed marijuana rescheduling rulemaking

White House executive action directing continued review of cannabis scheduling (2025)

Pennsylvania Medical Marijuana Act, 35 P.S. §§ 10231.101 et seq.

New York Marijuana Regulation and Taxation Act

Financial Crimes Enforcement Network guidance on marijuana-related businesses