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The White House Signals It Wants To Reclassify Cannabis; MariMed Poised To Benefit

President Donald Trump is expected to make a decision today to reclassify cannabis from Schedule I to Schedule III under the Controlled Substances Act. The impending decision has sparked significant interest among investors.

This is because rescheduling is widely viewed as one of the most important potential catalysts for the nearly $40 billion legal cannabis industry. It has the potential to reshape participation in capital markets, reduce operational burdens, and materially improve the earnings profile of compliant operators.

What are the benefits of rescheduling for investors?

Moving cannabis from Schedule I to the less restrictive Schedule III category will have several important effects. These effects, and why they matter for investors, include the following:

• The Effect: Even though rescheduling does not legalize cannabis federally, it makes incremental regulatory progress more likely.

  Why it’s important: Rescheduling should improve the outlook for federal banking reform by lowering perceived compliance and enforcement risks for banks and other financial institutions. Analysts at Reuters and Politico note that Schedule III status will make it easier for financial institutions to serve state-legal operators. Over time, this could broaden access to commercial lending, lower the cost of capital, and draw more institutional investors into the sector.

• The Effect: The federal government officially acknowledges that cannabis has accepted medical uses and a lower potential for abuse than Schedule I substances like heroin.

  Why It’s Important: A majority of Americans already support cannabis legalization and over 64 million people consumed cannabis in 2024. Rescheduling will accelerate accredited medical research into medications derived from cannabis.

  That should result in a significant increase of consumers who embrace cannabis as a qualified alternative to opioids for chronic pain, sleep, anxiety and other ailments.

• The Effect: State-legal cannabis businesses, including companies like MariMed Inc., would no longer be subject to the IRS Section 280E tax penalty, which prevents them from taking normal business deductions. Recent industry modeling shows that top multistate operators have generated billions of dollars in cumulative cash flow, but a significant portion of that was under 280E tax drag. A GreenWave Advisors analysis estimated that over the last six years the largest operators collectively generated roughly $2.7 billion in cash flow, with about $1.7 billion related to 280E liabilities, implying a potential multibillion-dollar relief opportunity when 280E is eliminated.

  Why It’s Important: Eliminating 280E will materially improve profitability and free cash flow for compliant operators. The industry will finally be taxed like other consumer packaged goods sectors, unlocking capital for reinvestment, product innovation and expansion.

  MariMed is well positioned for this shift. The company owns award-winning cannabis brands that traditionally rank among the best-selling edibles, beverages, and flower products in Illinois, Maryland, Massachusetts, and Delaware. Recent agreements will further expand distribution of the company’s brands to New York and Pennsylvania. Removing the burden of 280E will contribute to the company’s implementation of its strategic plan: To own the top cannabis brands, nationally, by 2030 through continued distribution expansion.

To learn more about MariMed, visit the company’s Investor Relations website at ir.marimedinc.com.

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