The Cannabis Industry’s New Best Friend? President Trump

By some measures, the legal cannabis industry is flowering. It has grown to around $30 billion today from less than $20 billion just six years ago. But investors have remained wary of its high taxes, marijuana’s illicit status at the federal level and the operational costs of complying with a patchwork of state regulations.

Now the Trump administration is pushing major policy changes that could hand marijuana companies a huge windfall and unlock new investment in the industry.

Last week, the government relaxed federal controls on medical marijuana. While that does not make medical marijuana legal under federal law, it moves the product from a class of highly addictive drugs, such as heroin, to a category of lower-risk medicines, like prescription Tylenol, that are overseen by the D.E.A. The Trump administration has also started a process to reclassify cannabis more broadly.

For some cannabis businesses, reclassification could cut tax bills in half. Companies that sell marijuana are currently taxed largely on their income, rather than their profits, resulting in effective tax rates of around 70 percent, more than double those of other businesses. Under the new category, those licensed to sell medical marijuana can claim common tax deductions for expenses like rent and payroll, according to accountants and tax lawyers. A broader reclassification would do the same for recreational marijuana.

Article source: https://www.nytimes.com/2026/05/02/business/dealbook/cannabis-industry-trump.html