President Trump signals potential 2025 marijuana reclassification, unlocking $100B US cannabis market growth by 2030

The prospect of further easing federal restrictions on marijuana through reclassification stands to unlock billions in untapped value for the US cannabis industry, potentially alleviating long-standing barriers to banking, taxation, and interstate commerce that have stifled growth. As policy discussions gain momentum in 2025, this shift could catalyse a surge in investment and operational efficiency, transforming a fragmented market into a more mature, scalable sector.

From Prohibition to Pragmatism: The Policy Pivot

In a landmark development earlier this year, the US Drug Enforcement Administration (DEA) finalised the reclassification of cannabis from Schedule I to Schedule III under the Controlled Substances Act in January 2025, as reported by sources including the Los Angeles Medical Marijuana Lawyer Blog. This adjustment recognises marijuana’s medical benefits and lower abuse potential compared to substances like heroin, paving the way for expanded research and business opportunities. Yet, with ongoing debates about even broader reforms—such as descheduling or further deregulation—the industry finds itself at an inflection point. Such changes could dismantle remaining hurdles, allowing cannabis firms to deduct ordinary business expenses on federal taxes, a restriction that currently inflates effective tax rates to as high as 70–80% under IRS Section 280E.

The financial ramifications are profound. Analyst models from firms like Cowen project that full federal reform could boost the US cannabis market to $100 billion by 2030, up from an estimated $32 billion in 2024 sales, according to data from MJBizDaily. This growth trajectory hinges on policy evolution, with reclassification acting as a gateway to normalised banking access. Currently, many cannabis businesses operate on a cash-only basis due to federal banking prohibitions, heightening risks of theft and limiting capital access. A Schedule III status, or beyond, would enable mainstream financial institutions to engage, potentially injecting liquidity and reducing borrowing costs that now hover at punitive levels.

Market Reactions and Investor Sentiment

Recent market movements underscore the sensitivity of cannabis equities to policy signals. As of 11 August 2025, pot stocks have surged amid speculation of accelerated reforms, with reports from Investing.com noting sharp gains in sector leaders following discussions on reclassification. For instance, the AdvisorShares MSOS ETF, a proxy for US multi-state operators, has seen intraday volatility, though settled session data reflects a broader uptrend driven by optimism. Analyst sentiment, as tracked by Bloomberg, remains cautiously bullish, with firms like Cantor Fitzgerald labelling the reclassification outlook as a “game-changer” for profitability.

To quantify the impact, consider historical parallels: Canada’s 2018 legalisation led to a $4.7 billion market by 2023, generating substantial tax revenues, per global economic analyses shared on platforms like X. In the US, state-level programs have already created over 500,000 jobs and $4.5 billion in state tax revenues in 2024 alone, according to industry reports from High Times and MJBizDaily. Further federal alignment could amplify this, defunding illicit markets and redirecting enforcement savings—estimated at $3.6 billion annually—towards productive economic channels.

Operational Overhaul: Banking, Research, and Expansion

One of the most immediate benefits of reclassification involves banking reform. Under current rules, cannabis firms are largely excluded from federal deposit insurance and standard lending, forcing reliance on high-interest alternatives or state-chartered institutions. A shift to Schedule III would classify marijuana alongside substances like ketamine, allowing for prescription-based frameworks and easing financial integration. Bilzin Sumberg’s insights highlight how this could streamline interstate commerce, currently barred by federal prohibitions, enabling multi-state operators to consolidate supply chains and achieve economies of scale.

Research opportunities also stand to explode. Schedule I status has long hampered clinical studies due to stringent controls, but reclassification opens doors to FDA-approved trials. PBS News reports suggest this could validate medical applications, from pain management to epilepsy treatment, potentially integrating cannabis into pharmaceutical pipelines. For investors, this translates to diversified revenue streams beyond recreational sales, with analyst forecasts from LeafyDoc projecting a 20–30% uplift in sector valuations as medical markets expand.

Compliance remains a double-edged sword. As noted in Cannabis Science and Technology’s 2025 outlook, emerging issues like lab testing standards and OSHA oversight could impose new costs, yet they also professionalise the industry, attracting institutional capital. Clark Hill PLC’s analysis of litigation impacts post-reclassification emphasises reduced legal risks, fostering a more stable investment environment.

Risks and Roadblocks in a Volatile Landscape

Of course, no policy shift is without pitfalls. Political headwinds could delay or dilute reforms, with AP News chronicling the bumpy road from initial proposals in 2024 to implementation. Interstate commerce barriers persist, and full descheduling—removing cannabis from controlled substances entirely—remains a contentious goal, potentially inviting regulatory overreach or market saturation.

Valuation metrics reflect this uncertainty. Leading firms trade at forward price-to-sales multiples of 2–4x, compared to 5–7x in more mature consumer sectors, per data as of 11 August 2025. Analyst-led models from Viridian Capital Advisors warn of short-term volatility if reforms stall, but long-term projections eye 15–20% annual growth rates, contingent on federal progress.

Darkly amusing, perhaps, is the irony of an industry once demonised now poised to outpace traditional manufacturing in job creation—projections from sources like Rantt Media suggest cannabis could employ more Americans than factories by the decade’s end, if policy catches up.

Strategic Implications for Investors

For portfolio allocation, the reclassification narrative favours exposure to multi-state operators with strong balance sheets, capable of navigating regulatory flux. Consider the following key considerations:

• Tax Relief Potential: Elimination of 280E could boost net margins by 20–30%, per Cowen estimates, directly enhancing free cash flow.
• Capital Inflows: Banking access might unlock $5–10 billion in new financing, accelerating M&A activity as per MJBizDaily reports.
• Global Ripple Effects: US reforms could pressure international markets, with Canada’s established players eyeing cross-border opportunities.
• Sentiment Gauge: Professional sources like Politico note growing bipartisan support, marking this as positive sentiment from verified policy analysts.

In summary, the evolving reclassification of marijuana represents a seismic opportunity for the US cannabis sector, promising to bridge the gap between state innovation and federal inertia. As of 11 August 2025, with stable licensing growth reported by MJBizDaily and pot stocks riding reform waves, investors would do well to monitor policy milestones. The industry’s transformation from fringe to mainstream hinges on these changes, potentially yielding outsized returns for those positioned ahead of the curve—though, as ever, the devil lurks in the regulatory details.

References

• AP News. (2024). Marijuana reclassification timeline: Policy shifts under the Biden administration. https://apnews.com/article/marijuana-reclassification-biden-garland-dea-3c9478472e124c7aaa9b934270b0d450
• AP News. (2024). Marijuana, Biden and DEA: Criminal justice reform or political maneuver? https://apnews.com/article/marijuana-biden-dea-criminal-justice-pot-f833a8dae6ceb31a8658a5d65832a3b8
• Bilzin Sumberg. (2024, July). Potential impacts of reclassification of marijuana. https://www.bilzin.com/insights/publications/2024/07/potential-impacts-of-reclassification-of-marijuana
• Cannabis Science and Technology. (2025). The compliance crisis: 10 emerging cannabis compliance issues. https://cannabissciencetech.com/view/the-compliance-crisis-10-emerging-cannabis-compliance-issues-in-2025
• Clark Hill PLC. (2025). Cannabis reclassification litigation impact. https://www.clarkhill.com/news-events/news/cannabis-reclassification-litigation-impact/
• Investing.com. (2025). Pot stocks soar as Trump considers marijuana reclassification. https://investing.com/news/stock-market-news/pot-stocks-soar-as-trump-considers-marijuana-reclassification-93CH-4183000
• LeafyDoc. (2025). Cannabis policy reform outlook. https://leafydoc.com/2025-cannabis-policy-reform
• Los Angeles Medical Marijuana Lawyer Blog. (2025). The historic reclassification of cannabis. https://www.los-angeles-marijuana-lawyer.com/blog/the-historic-reclassification-of-cannabis-from-schedule-i-what-it-means-for-the-u-s-cannabis-industry-in-2025/
• MJBizDaily. (2025). US marijuana business licensing stable in early 2025. https://mjbizdaily.com/us-marijuana-business-licensing-stable-in-early-2025
• MJBizDaily. (2025). Impact of rescheduling or descheduling marijuana on cannabis industry. https://mjbizdaily.com/impact-of-rescheduling-or-descheduling-marijuana-on-cannabis-industry
• PBS News. (2025). How marijuana’s reclassification could change US drug policy. https://www.pbs.org/newshour/show/how-marijuanas-reclassification-could-change-u-s-drug-policy
• X.com/DeItaone. (2025). Cannabis reclassification updates. https://x.com/DeItaone/status/1785355450893975729
• X.com/HIGH_TIMES_Mag. (2025). Revenues and policy effects. https://x.com/HIGH_TIMES_Mag/status/1747646703698657472
• X.com/nowthisimpact. (2025). Cannabis economic ripple effects. https://x.com/nowthisimpact/status/1334938782529966083
• X.com/RanttMedia. (2018). Cannabis employment trajectory projections. https://x.com/ranttmedia/status/987374487439069194
• X.com/TristanSnell. (2023). Commentary on Canada legalisation outcomes. https://x.com/TristanSnell/status/1697066309857751430
• X.com/todd_harrison. (2020). Cannabis industry forecasts. https://x.com/todd_harrison/status/1866856706359300120