Federal Cannabis Rescheduling Creates New Banking Opportunities

Today, December 18, 2025, President Donald Trump signed an executive order to expedite the reclassification of cannabis. The executive order directed agencies to begin moving forward with the plan to transfer cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA). Under the CSA, cannabis is currently considered a Schedule 1 drug, along with heroin, LSD and ecstasy, which are not considered to have any acceptable medical use, according to the Drug Enforcement Administration. It will eventually be reclassified as a Schedule 3 drug, which, according to the DEA, have “a moderate to low potential for physical and psychological dependence.”

This move by the federal government marks one of the most significant developments in federal marijuana policy since its prohibition a half a century ago. Rescheduling will not federally legalize cannabis. But the policy change will allow state-licensed marijuana businesses to take federal tax deductions they’ve been deprived under an Internal Revenue Service (IRS) code known as 280E. It will also remove certain research barriers applied to Schedule I drugs. The change may also spur additional states to modernize their own policies on cannabis, as some lawmakers have cited the federal government’s restrictive classification of marijuana as a reason they have been uncomfortable with enacting legalization or at least allowing medical use.

This is a positive move for businesses in the cannabis industry and will provide many new business opportunities. Buchalter’s Cannabis & Hemp Industry Law Group began in 2013 and has deep industry experience with over thirty lawyers across each of its practice groups and hundreds of clients.  The attorneys in the Cannabis & Hemp Industry Law Group have substantial experience representing every aspect of the industry, including investment funds, multi-state operators, cultivators, manufacturers, distributors, retailers, intellectual property licensors, equipment lessors, factors, receivers, lenders, and packaging companies in connection with corporate, finance, real estate, intellectual property, employment, and litigation matters.

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