On December 18, 2025, President Trump signed an executive order directing the Attorney General to reclassify marijuana from Schedule I to Schedule III "in the most expeditious manner." The industry exhaled. Tax relief was coming. The crushing burden of Section 280E — the IRS provision that treats legal cannabis businesses like illicit drug traffickers — was finally on its way out.

That was 99 days ago. Nothing has changed.

On March 27, Congressman Steve Cohen (D-Tenn.) sent a pointed letter to Attorney General Pam Bondi and DEA Administrator Terrance Cole demanding a status update on rescheduling. Cohen reminded Bondi that HHS recommended the Schedule III move back in August 2023 — nearly three years ago — and that the DOJ had already blown past a statutory deadline under the HALT Fentanyl Act. Six days later, on April 2, Trump fired Bondi. The woman who was supposed to deliver rescheduling "in the most expeditious manner" never did.

The letter asks a simple question the industry has been screaming for months: When?

The White House says rescheduling remains on track. Acting AG Todd Blanche — Trump's former personal lawyer — is reportedly familiar with the rescheduling file, and industry sources are calling him "a net positive." Trump wants Blanche to sign the final rule rather than wait for Senate confirmation of a permanent AG. Sources say movement is underway, possibly within 30 to 60 days. But prohibitionist group Smart Approaches to Marijuana still has former AG Bill Barr on retainer to file a lawsuit the moment rescheduling is finalized. The legal fight is coming regardless.

Here's what non-cannabis business owners don't understand: Section 280E of the Internal Revenue Code prohibits any business "trafficking" in Schedule I or Schedule II substances from deducting ordinary business expenses. Rent. Payroll. Marketing. Legal fees. Insurance. All non-deductible.

The result? Effective tax rates that reach 70% or higher for many operators.

Schedule III substances are not subject to 280E. Once rescheduling is finalized, operators could deduct what every other legal business in America already deducts — payroll, rent, marketing, professional services, R&D. The IRS has been clear: until a final rule is published, 280E still applies. Full stop.

But here's the gut-punch for operators filing 2026 returns: if the IRS takes the position that relief only kicks in for tax years beginning after reclassification, operators who've been holding on could lose an entire year of deductions even if the rule drops this summer.

The numbers aren't abstract. Active cannabis business licenses in the U.S. fell to 37,555 in the most recent quarter — down 13% over two years. Cultivation licenses have been hit hardest, declining 24%, a loss of more than 5,000 permits since Q3 2023. Established markets like California, Oklahoma, and Michigan are consolidating fast.

The optimistic read is that this is market maturation — shedding excess capacity and weaker operators. And that's partially right. But it also ignores the role 280E plays in thinning the herd. When you can't deduct rent, you don't go under because you ran a bad business. You go under because the tax code made it mathematically impossible to survive.

While the DOJ sits on the rescheduling rule, the rest of the federal government keeps signaling that cannabis normalization is a done deal.

On March 20, the U.S. Army published updated enlistment regulations removing the automatic waiver requirement for recruits with a single marijuana possession conviction. The effective date? April 20. Yes — 4/20. The Army didn't comment on the symbolism, but the message is hard to miss: a cannabis conviction is no longer a meaningful barrier to serving your country.

That same week, Georgia lawmakers approved Senate Bill 220, expanding the state's medical cannabis program to allow flower and vaporized products for the first time and removing its longstanding 5% THC cap. The Centers for Medicare & Medicaid Services is preparing to launch a program allowing beneficiaries to access hemp-derived CBD at no cost under doctor recommendation.

The federal government's own actions are telling a story its regulatory apparatus refuses to formalize.

Smart operators aren't waiting for the final rule to start planning. Here's where the B2B cannabis industry needs to focus:

The executive order was the starting gun. But 99 days and one fired Attorney General later, the race still hasn't started. The good news: Acting AG Todd Blanche may move faster than Bondi ever would have, with a 30-to-60-day timeline now circulating. The bad news: every week of delay still costs operators money they'll never recover under a tax provision that even the White House agrees shouldn't apply to them. The question isn't whether rescheduling will happen. It's whether it'll happen fast enough to save the operators who are bleeding out right now.