President Trump's move to reclassify marijuana as a less-dangerous drug at the federal level could open the door for more scientific research and provide significant tax relief to Maine's growing cannabis industry.
But the reclassification falls far short of full federal legalization of the drug and could create implementation challenges, according to some observers.
Trump's executive order, signed on Thursday, doesn't legalize marijuana or cannabis at the federal level. But by directing federal agencies to re-designate marijuana from a Schedule I drug to Schedule III, cannabis would be treated more like anabolic steroids or Tylenol with codeine rather than highly addictive illicit drugs such as heroin and LSD.
This shift could have significant federal tax and financial benefits for licensed cannabis businesses in Maine, where medical marijuana has been legal for a quarter-century and where voters legalized adult, recreational use of cannabis in 2016.
"We hope to see federal legalization some day, but this is still a step in the right direction," said Hannah King, a Portland-based attorney and partner with the national firm Dentons who specializes in cannabis law and regulations. "It really will — across the spectrum from mom and pop (businesses) to the large publicly traded companies — provide really important tax relief that will allow them to pay their employees, expand their operations and do really important things that are going to benefit the communities in which they operate."
King was speaking prior to Trump issuing his executive order but when it was clear that the administration planned to pursue reclassification. Because the drug is currently Schedule I, state-licensed cannabis businesses are not allowed to deduct standard operating expenses and make other adjustments to lower their tax burden. King advocated for multiple years in Augusta to "de-couple" Maine's tax code from the federal policy in order to allow cannabis businesses to make those deductions on state taxes.
State lawmakers made that change in 2023. But King, who was speaking said some of her clients are currently paying an effective federal tax rate of 80%.
"So I think you will see companies be able to use that additional cash flow to acquire other companies, to kind of acquire to new retail locations, to further build out their cultivation, to maybe move into other states — things that they have wanted to do for a long time but maybe haven't had the cash flow to be able to execute on," she said.
Legal sales of medical and recreational marijuana topped $500 million in Maine last year for the first time. While recreational sales seemed to plateau this year, at half-a-billion dollars, cannabis is still a major growth industry for Maine.
"Every other business gets these tax deductions so that would go a long way for these business owners to try to keep up in this economy," said Rep. David Boyer, R-Poland.
Boyer helped lead the 2016 legalization campaign. He now represents parts of Androscoggin County in the Maine House and is the ranking Republican on the legislative committee that oversees cannabis regulation. Like King, Boyer sees relaxation of federal tax rules as potentially opening the door to Maine cannabis exports to other states with legal markets.
"Just like we like wine varietals from Napa or Washington state, folks like Maine's cannabis, just like they like Maine's craft brewing," Boyer said.
It was the administration of President Joe Biden administration, not Trump, that began the reclassification process more than two years ago. Trump's executive order frames the reclassification entirely around the potential medical benefits of marijuana and CBD, saying "the federal government must improve the research infrastructure for medical marijuana to better serve Americans."
Dr. Patty Hymanson, a neurologist and former state lawmaker from York, said there is no widespread accepted medical use of cannabis. And a big reason for that, Hymanson said, is marijuana's Schedule I designation, which has largely prevented robust, peer-reviewed scientific research.
So Hymanson said re-designating medical marijuana as Schedule III should change that.
"It does open the door for that and I think that will be really welcome for people to understand does it help a specific symptom and how much?" Hymanson said.
Schedule I drugs, such as heroin, are substances that are described as having "no currently accepted medical use and a high potential for abuse." Schedule III drugs, by comparison, are described as having accepted medical use and a moderate potential for physical and psychological dependence.
But Hymanson, who often dealt with cannabis policy as a former co-chair of the Legislature's Health and Human Services Committee, sees reclassification as potentially replacing old problems with ones. For instance, Schedule III drugs require prescriptions written by medical professionals with a license from federal Drug Enforcement Agency. Those prescriptions, Hymanson said, are then filled by licensed pharmacists dispensing very specific dosages of tightly regulated pharmaceutical drugs.
"I'm not sure how cannabis from your local medical cannabis store is going to be a Schedule III drug," she said. "Those all need prescriptions from a provider with a DEA license."
Maine's Office of Cannabis Policy had no immediate comment on the executive order. In 2024, as the Biden administration began moving forward with reclassification, the office acknowledged the potential research opportunities and tax benefits that could come with a Schedule III designation. But the office indicated that a reclassification would not likely trigger any changes to the state's regulation of the cannabis industry.
"The Maine Office of Cannabis Policy (OCP) anticipates no changes to the state’s medical and adult use cannabis programs as a result of this rescheduling," the office said at the time. "The USDEA and the Food and Drug Administration (FDA) regard state-regulated, non-hemp cannabis programs as inconsistent with federal law as a Schedule I substance, and those same programs would remain inconsistent with federal law as a Schedule III substance. However, across the past three presidential administrations, the Justice Department has taken a non-enforcement approach against state-regulated medical and adult use cannabis programs, and OCP fully expects there to be no change to that posture."
