Cannabis in the United States – Developments, Dynamics, and Lessons

From Prohibition to Medical Legalization 

California set the precedent in 1996, becoming the first U.S. state to legalize medical cannabis. This marked a fundamental turning point in drug and health policy and initiated a dynamic that gradually spread to other states. A further shift occurred in 2012, when Colorado and Washington became the first states to legalize cannabis for adult recreational use. Today, many states have legalized medical cannabis, recreational cannabis, or both. At the same time, cannabis has remained illegal at the federal level, creating a structural tension between state and federal law that persists to this day. 

U.S. Cannabis Legal Status by State:  

The Most Significant Shift in U.S. Cannabis Policy in Around 50 Years 

In December, a politically and economically significant step followed at the federal level. President Trump initiated the formal process via executive order to reclassify cannabis from Schedule I to Schedule III. This marked the first time the federal government formally acknowledged that cannabis should no longer be considered a substance with no accepted medical use. While the proposed reclassification does not constitute legalization and is not yet legally in force, it clearly signals a political reassessment at the federal level. 

Expected Effects of the Rescheduling Process 

This reassessment has one central implication: cannabis would no longer be regulated in the same category as heroin. From this, three key effects for the industry emerge. First, the tax burden could be significantly reduced. Until now, many companies were unable to deduct operating expenses for tax purposes because they were dealing with a Schedule I substance. Under Schedule III, profits could be taxed more realistically, potentially improving margins and making business models appear financially healthier. Second, research would become considerably easier. Clinical trials, medical applications, and the development of new products would be more feasible, opening doors in particular for pharmaceutical, healthcare, and medical cannabis companies. Third, rescheduling sends an important signal to banks and investors. Many financial institutions and funds that previously excluded cannabis for compliance reasons would gain greater regulatory flexibility. 

Capital Markets, Stocks, and the Revaluation of the Industry 

In capital markets, the decision has already had a noticeable impact. Cannabis-related ETFs recorded significant gains within a short period, and several funds focused on the U.S. market posted marked increases in December. Investors are now weighing whether this represents a short-term rebound or the beginning of a more sustainable revaluation of the sector. 

At the same time, key challenges remain. Cannabis is still illegal under federal law, and legal uncertainty continues to shape the market. One particularly striking feature is the structural contradiction in capital markets: U.S. companies generating revenues in the billions still operate in formal conflict with federal law and are excluded from major U.S. stock exchanges. Canadian companies, by contrast, are prohibited from engaging in THC businesses in the U.S. but are listed on Nasdaq or the New York Stock Exchange and have access to global capital. Cannabis is clearly a multibillion-dollar market, yet it is not treated as such in capital markets. This is precisely where the current revaluation begins: greater access to capital, more research, and increased trading activity could lead, over time, to a more sustainable valuation of an industry that has long outgrown its start-up phase. 

Improvements for Patients 

For patients, these developments are primarily a signal of recognition. The reassessment strengthens the medical positioning of cannabis and may, over the long term, help increase acceptance of prescribing practices, research, and patient care. At the same time, access remains highly dependent on individual state regulations. Differences in approved indications, prescribing practices, product availability, and reimbursement continue to shape everyday patient experience. While the federal reassessment is unlikely to change this in the short term, it does open up new opportunities over the medium term for evidence-based care and standardized medical frameworks. 

Relevance for Germany and the Domestic Debate 

For Germany, developments in the United States are particularly relevant from a strategic and comparative perspective. The U.S. model illustrates how reforms can be implemented incrementally and how much momentum medical cannabis can generate when regulatory recognition, research, and market access align. As Germany increasingly establishes itself as a relevant medical cannabis hub in Europe, developments in the U.S. remain an important reference point for shaping the market going forward. 

We look forward to continuing to follow these topics over the course of the year and to engaging in conversation with many of you in person at upcoming events.

Anything else?

Do you have specific questions or suggestions for the Cannabis Briefing? Then send us an email to briefing@www.cansativa.de. If you are interested in revolutionising the cannabis industry with us, then stay tuned and follow our briefings!

We wish you a good read!

Best wishes from both of us,