US Authorities Changed Federal Status of Cannabis to Expand Research 0 12

The Biden administration on April 23 moved cannabis to a category of substances with less strict regulation, CNBC reports. This decision does not legalize the drug at the federal level but moves it from Schedule I to Schedule III, significantly expanding opportunities for scientific research and medical use. The financial implications of this step are also substantial, as the change in status exempts relevant companies from the provisions of Section 280E* of the US Tax Code.

Now, businesses will be able to deduct standard expenses such as rent and salaries, as well as gain access to banking services that were previously closed off. Curio Wellness co-founder Wendy Bronfein noted that "the improved cash flow from the status change will support reinvestment, strengthen stability, and help create momentum for more consistent standards over time."

The reclassification process was initiated in 2024 by the Biden administration, followed by a period of public discussion. The current decision came after a recent directive from Donald Trump to expedite clinical trials of several other drugs, marking one of the most significant shifts in US federal policy in decades.

*Section 280E is a provision of US tax law that prohibits companies dealing with substances from strict control lists from deducting ordinary business expenses from their taxable income. As a result, such businesses are forced to pay taxes on their entire gross profit, making their tax burden abnormally high.