Cannabis Musings - December 22, 2025

Some thoughts on that executive order.

Friends, tomorrow, these Cannabis Musings will look back at our January predictions to see what we got right and what we got very wrong. But today, a few thoughts about Thursday’s news, wherein President Trump signed a certain executive order:

• I was fairly skeptical this would happen, so call me pleasantly surprised that President Trump took this action.

• Much credit is due to President Trump for spending political capital to do something positive and constructive for cannabis. There’s also some fascinating reporting by Natalie Fertig at Politico about the lobbying efforts that got us to this place.

• Thankfully, the executive order did not attempt to reschedule cannabis by fiat, but instead took the proper (and much more defensible) step of ordering the Department of Justice to essentially continue the process begun by President Biden in 2022, which came to a grinding halt when President Trump took office.

• The price behavior of cannabis stocks served to further support our periodic observation that “cannabis stocks are most untethered to the usual things that drive prices, like performance.” It made perfect sense that prices spiked on the rumor, just like prices did back in 2022 when Biden announced the start of the rescheduling process (although it’ll be some time before the change actually occurs). However, if you noticed, prices cratered on Thursday, just around the time that news leaked about the actual content of the executive order:

  

  That’s a chart from Yahoo Finance showing the stock price of MSOS, one of the cannabis stock exchange-traded funds, focused on the run and stumble late last week.
  
  If you follow the schmoozing of retail cannabis stock traders on social media, you’ll know that they’re singularly focused on cannabis banking. To them, passage of the SAFE(R) Banking Act (one of our favorite punchlines around here) will save the cannabis industry, mainly because it might lead to listing cannabis stocks on US stock exchanges, which then might lead to stock prices going to the moon, which will somehow save the industry. (We’ve talked before about why this might not pan out that way.) Well, there was a rumor that the executive order might contain something about cannabis banking. We don’t know for sure, and there’s also chatter that institutional investors drove price action, but likely the banking rumor acted as gasoline on a wildfire, and so, when it didn’t happen, well, imagine the disappointment.

• Expect this to be challenged, heavily, by certain well-funded interest groups. Indeed, they’re already telling us that a challenge is coming. Indeed, the press release notes that they’ve hired Torridon Law, a law firm headed up by former U.S. Attorney General Bill Barr, who really doesn’t like cannabis. Who knows on what grounds they’ll challenge the process, but it’ll surely slow things down.

• It also remains to be seen how the rest of the administrative process will pan out. Will the DEA, which opposed rescheduling while President Biden was in office, and effectively brought that process to a standstill, (ironically?) kowtow to President Trump’s executive order? (Probably.) Will the process end up back in an administrative court before another DEA Administrative Law Judge? (Unclear.) Will the cannabis industry continue its previous infighting over how to litigate that process? (Please, no, don’t.)

• When rescheduling finally occurs, and 280E no longer applies to plant-touching companies (280E will still exist under the US Tax Code), it remains to be seen whether the IRS will allow that to work retroactively, or if all of the accrued and unpaid 280E-specific federal taxes that are being carried on the books of many cannabis companies, will still be due and owing. It’s uncertain at this point, but it is my understanding (and this is not tax advice) is that it won’t work retroactively unless something changes.

• Also, keep an eye on still-extant proposed Senate legislation that would have 280E apply to cannabis businesses even with rescheduling.

• There’s a lot of speculation about the meaning of the executive order’s language about hemp: “Adding complexity is the fact that some full-spectrum CBD products will once again be controlled as marijuana under the CSA when section 781 of Public Law 119-37 goes into effect because they contain THC levels above the per-container threshold set by that law.” I read that to really just be focused on making sure that the order’s mandate to expand public access to hemp-derived CBD isn’t stymied by the recent Federal law that closed the hemp loophole, since CBD is a big part of President Trump’s action here.

  
  However, others are reasonably reading deeper into the use of the phrase “full-spectrum CBD” (which generally means CBD that contains all of the natural cannabinoids, terpenes, etc., including THC) suggests that there’s an intent or implication to allow for some form of hemp-derived product containing THC. To me, that’s edging on a Talmudic-level read, but it’s reasonable enough to consider seriously. The wildcard is that, while rescheduling remains an administrative process within the executive branch, any further changes to what flavors of hemp derivatives are allowed require Congress to pass new laws. Perhaps this gives Congress a little more political cover to allow for something to happen, or maybe it’s all just about CBD that doesn’t have enough THC to have psychoactive/psychotropic effects.

• Even if all of this goes sideways, or takes more time than any of us would like, this action sends two strong signals. First, that President Trump (almost certainly) won’t do anything to impede the forward progress of licensed cannabis. Back during his first term, when newly-appointed U.S. Attorney General Jeff Sessions rescinded the vaunted Cole Memo, there was palpable concern within the industry that Sessions’ Department of Justice might shut the whole thing down. That didn’t happen, thankfully, and any lingering concerns for this second go-around were likely satisfied.

• Second, it means that we’re doing something right here. The conversation is continuing. We’re changing the narrative. We’re getting more focused on what needs to get done and how to achieve it. Sure, it’s not fully satisfying, but given that our industry exists as a matter of grace on the part of the Federal government, it’s not too shabby.

If you want even more on the executive order, we schmoozed about all of this on Friday’s Cultivated Media’s This Week in Cannabis LIVE.

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Be seeing you.

© 2025 Marc Hauser. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. The foregoing represents my own views and not those of Jardín, B&Y Ventures, or anyone else who employs/hires me.

Watch me schmooze almost every Friday at Noon ET on This Week in Cannabis LIVE with Jeremy Berke and Jay Rosenthal of Cultivated Media and AnnaRae Grabstein and Ben Larson of the High Spirits Podcast. Access the livestream and recordings here.