WASHINGTON, D.C. – The Wall Street Journal and CNN reported August 8 that President Donald Trump said privately at a fundraiser that he was open to reclassifying cannabis under federal law, a move that could have far-reaching implications for the legal industry, the illicit market, national drug policy, and electoral politics in the 2026 cycle. 

On August 11, in a news conference Trump held in the White House briefing room, Trump made it public:

We're looking at reclassification and we'll make a determination over the next -- I would say over the next few weeks, and that determination hopefully will be the right one. It's a very complicated subject.

Classified as a Schedule 1 drug, cannabis is listed alongside heroin and LSD as "drugs with no currently accepted medical use and a high potential for abuse."

If he decides to move forward, reclassifying cannabis from Schedule 1 to Schedule 3 could turn out to be one of the most popular policy shifts of his presidency and would also deal a direct blow to drug cartels, intoxicating unregulated hemp, and the unregulated illicit market, while giving struggling licensed cannabis operators across the country a fighting chance.

How It Really Works: The Unfair Fight Between Legal Cannabis and Unregulated 'Gas‑Station' Hemp

According to three people who attended a high-dollar fundraiser at Trump’s New Jersey golf club, the president told donors he was “interested” in cannabis rescheduling, the Wall Street Journal reported on August 8. “Discussions are ongoing in the administration,” the paper added, noting that “it remains unknown what Trump will ultimately decide.”

CNN reported that Trump has privately signaled a willingness to ease cannabis restrictions. According to the network, sources say the White House has studied the pros and cons of reclassification and that a report is on Chief of Staff Susie Wiles’ desk. However, internal divisions remain over whether and how to proceed. 

Law and Order Framing

Reclassification would take revenue away from illicit cannabis markets, including cartel operations, while shutting down the competitive advantage of intoxicating hemp products sold outside state cannabis systems. These hemp products are often untested, untaxed, and not subject to the same safety or labeling rules that apply to licensed operators.

IVN has reported extensively on these dynamics in How It Really Works: The Unfair Fight Between Legal Cannabis and Unregulated Gas Station Hemp.

The change would also exempt legal cannabis companies from the limitations of Section 280E of the Internal Revenue Code, which currently bars businesses trafficking in Schedule I or II substances from deducting ordinary business expenses. Due to this restriction, legitimate cannabis companies paid over $1.8 billion more in federal taxes in 2022 than comparable non-cannabis businesses, according to data from Whitney Economics.

Industry advocates argue that rescheduling would reward operators who have been following the law and paying steep compliance costs while finally punishing those who do not.

Stocks Surge on News of Possible Rescheduling

The news from the White House briefing room sent cannabis sector stocks sharply higher on August 11. Shares in Tallahassee-based Trulieve Cannabis, whose Founder and CEO, Kim Rivers, attended the fundraising event, jumped nearly 30 percent. 

Other publicly traded cannabis companies and cannabis ETFs also posted double-digit gains.

Rivers told investors during the company’s quarterly earnings call last week that she has become “more confident over the last three to six months” that the Trump administration will move forward with reform. “You have a president and you have an administration that specifically campaigned on federal reform and specifically on rescheduling,” she said.

David Culver, senior vice president of public affairs for the U.S. Cannabis Roundtable, called it “long overdue and historic reform,” adding that it would “lift outdated federal restrictions that have stifled scientific research for decades.”

Cannabis Industry Donors Have Backed Trump

Legal cannabis industry players have been making political contributions aimed at winning favor with the White House. A cannabis industry-funded organization donated $1 million to Trump’s political action committee, MAGA Inc., and records show Trulieve contributed $750,000 to his inaugural committee. The U.S. Cannabis Council, since rebranded as the U.S. Cannabis Roundtable, gave $250,000.

A Political Opening Democrats Left on the Table

Cannabis has been classified as a Schedule 1 drug, alongside heroin and LSD, since the Nixon administration. No Democratic president, including Barack Obama and Joe Biden, successfully reclassified it, despite overwhelming public support, particularly among the Democratic Party base.

If Trump acts, it would allow him to take an issue that Democrats have long claimed as their own and make it a Republican talking point ahead of the midterms. The move could resonate with midterm voters as a sign of decisiveness and leadership where previous administrations failed.

Trump’s Past Statements on Cannabis

During the 2024 campaign, Trump signaled openness to legalization and specifically to reclassification. At a Mar-a-Lago press conference, he said:

As we legalize it, I start to agree a lot more because it is being legalized all over the country. Florida has something coming up. I will be making a statement about that fairly soon, but as we legalize it throughout the country, whether that is a good thing or a bad thing, it is awfully hard to have people all over the jails that are in jail right now for something that is legal. So, I think obviously there is a lot of sentiment to doing that.”

In the final weeks before Election Day, Trump endorsed Florida’s Amendment 3 to legalize adult-use cannabis and pledged that, if re-elected, he would pursue reclassification, expand banking access for licensed operators, and uphold states’ rights on cannabis policy. 

“As a Floridian, I will be voting YES on Amendment 3 in November,” Trump posted on Truth Social.

As President, we will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking (sic) fo state authorized companies, and supporting states rights to pass marijuana laws, like in Florida, that work so well for their citizens.”

The DEA and the Delay

The U.S. Drug Enforcement Administration is responsible for the reclassification process. Hearings scheduled for January 21, 2025, were paused on the eve of Trump’s inauguration at the DEA’s request.

Trump’s choice for DEA administrator, Terrance Cole, told senators during his confirmation that reclassification was a priority for him, but the issue has not advanced. 

Observers believe that if Trump decides to act, Cole will either carry it out or be replaced.

Gaetz: “Populism Meets Practicality”

Florida U.S. Rep. Matt Gaetz, an early Trump ally and prominent commentator on the issue, used his One America News program on August 10 to highlight the political potential of reclassification.

If President Trump does this, the game is over for Democrats at the ballot box. We could be the party that allows people to safely use marijuana without pretending it is for your glaucoma-ridden cat. It is populism meets practicality. Suddenly, MAGA hats in line at the dispensary, patriots buying prerolls called ‘1776 Freedom Kush.’ Beautiful.”

Gaetz also pushed back on the idea that cannabis is a gateway drug:

Now do not get me wrong. There are still people clutching their pearls saying buying marijuana is a gateway drug. Yeah, so is drinking Mountain Dew if you consume enough of it. In reality, marijuana is more like a gateway to eating three sleeves of Oreos and having deep thoughts about how ceiling fans work.”

What Happens Next

Whether President Trump moves forward and directs his DEA to reschedule cannabis from Schedule 1 to Schedule 3 remains uncertain. But if he does, his actions will reshape the economic landscape for licensed operators, undermine illicit markets, and even shift the political balance of power in favor of Trump’s party in the midterms.

Cannabis industry leaders, political observers, and reform advocates are watching closely to see if the administration follows through on what could be the most significant federal cannabis policy change in more than 50 years.