Trump signs order to expand access to marijuana, lower taxes on cannabis businesses

President Donald Trump on Thursday signed an executive order directing Attorney General Pam Bondi to fast-track the rescheduling of marijuana as a Schedule III drug, a move that could bring swift and wide-ranging changes to Minnesota’s cannabis industry.

Once finalized by the Drug Enforcement Administration, marijuana would join substances such as ketamine and Tylenol with codeine — and, for the first time, be formally recognized under federal law as having medical use.

“We have people begging for me to do this. People that are in great pain,” Trump said from the Oval Office, backed by physicians in white coats.

The shift also lifts a major tax burden that has pinched Minnesota operators since the state legalized cannabis last year, while opening the door to expanded medical research.

Trump’s order further authorizes a pilot program to reimburse some Medicare patients for the cannabis compound cannabidiol, commonly known as CBD.

The executive order also frames the move as long-overdue recognition of marijuana’s medical value, citing FDA findings that cannabis can help treat pain, anorexia and chemotherapy-related nausea.

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“That is the primary benefit for a business — with rescheduling to Schedule III, it will eliminate what the industry calls the 280E tax penalty that disallows cannabis businesses from deducting most expenses on their taxes that other businesses normally can deduct,” said Jason Tarasek, a Minnesota cannabis attorney who advises operators and advocates.

“This makes every cannabis business instantly more profitable because they will have the benefit of deducting expenses on their taxes,” he said.

For social-equity microbusiness operators such as Brian Bartley, the change could be transformative. Bartley is working to launch Green Lane Express, a vertically integrated grow-and-retail operation in Brooklyn Park, and he hopes to open by April 20 — a symbolic date in cannabis culture.

Rescheduling, he said, would immediately relieve the federal tax pressure that has shaped every financial decision he has made while trying to open.

“I’d be able to take the deductions any natural business would take — payroll, rent, professional services,” he said. “That really helps out a lot with an influx of cash that would normally be going to the federal government.”

“I don’t know if the spigot will open automatically,” he said, “but it certainly doesn’t hurt.”

Because marijuana remains federally illegal, banks and credit unions must still comply with strict federal rules that treat cannabis like any other controlled substance — a risk many institutions are unwilling to assume.

That means owners cannot access traditional loans, government-backed mortgages or small-business support, and many struggle to find institutions willing to handle deposits or payment processing.

“It doesn’t solve banking. It doesn’t solve insurance. It doesn’t solve the fact that a cannabis business can’t seek bankruptcy protection because it is still federally illegal. … But symbolically, it is an absolute tectonic shift in the right direction,” Tarasek said.

Bartley sees the same limitations. Even with 280E gone, cannabis operators would still struggle with day-to-day business systems that other industries take for granted.

But Jon Halper, owner of Top Ten Liquors and a major wholesaler of low-dose hemp-derived beverages, said retailers — both hemp and cannabis — are accustomed to financial workarounds anyway.

“You might have credit card issues, you might have insurance issues, it’s not smooth sailing,” he said. “But, we have to sort through those already. These are already things that we go through, day in and day out, with our business.”

A Schedule III designation could expand access for clinical studies at institutions such as the University of Minnesota, where scientists have long said federal rules make meaningful cannabis research difficult.

Rescheduling removes some of the biggest procedural hurdles. It is generally easier to obtain and maintain a DEA registration to study a Schedule III drug than a Schedule I substance, which could encourage more researchers to pursue cannabis projects.

But scientists emphasize that many of the limitations remain. Human studies would still have to use cannabis that meets Food and Drug Administration quality standards and is covered by a formal Investigational New Drug application — not the products sold in Minnesota dispensaries.

And even with expanded research pathways, experts say the federal government is unlikely to approve whole-plant cannabis as a prescription drug.

Hemp producers — a major sector in Minnesota given the state’s booming low-dose THC drink market — are also bracing for a potential federal crackdown on intoxicating hemp-derived products. That could push hemp retailers toward the state’s regulated cannabis system.

“All of these things are combining to push hemp folks into cannabis, 100%,” Tarasek said. The distinction between the two, he added, was always somewhat artificial: “It’s the same plant.”

He also noted that the federal government’s move to shut down the so-called Farm Bill loophole next year is “a step backwards” but said rescheduling is a “step forward” that may soften the blow.

Halper said the shift could be even more dramatic for hemp retailers, who face the loss of federal protection next year.

But he said rescheduling may give Minnesota lawmakers a path to preserve the low-dose beverage market by bringing it under the cannabis umbrella.

For Minnesota operators who have navigated high taxes, limited financing and an evolving regulatory system, the potential move is meaningful but incomplete.

Tarasek cautioned that rescheduling should not be mistaken for legalization.

“Does this mean the federal government is going to legalize marijuana tomorrow? Absolutely not,” he said. “But it is movement from a federal government that has been stuck in the past, and it’s great news for the cannabis industry and for consumers.”

Bartley, who is going through the process of zoning approvals and is preparing to begin construction, said the timing could be crucial.