After months of silence and bureaucratic stalling, the DEA finally has a new boss: Terrance Cole, confirmed by the Senate earlier this week.
That might not sound like major weed news since it’s the DEA and all, but it is. The federal effort to reschedule cannabis — perhaps the biggest shift in US drug policy in over half a century — now flows directly through him.
Let’s break it down: Cannabis is still a Schedule I substance under federal law, the same category as heroin and LSD, meaning the government officially considers it to have no medical value and a high potential for abuse. Yes, even in 2025, after nearly half of the U.S. states have legalized cannabis for adults to buy and consume.
Rescheduling to Schedule III, alongside Tylenol with codeine and anabolic steroids, wouldn’t legalize cannabis outright. But it would mark the biggest federal policy shift since the Nixon Administration launched the War on Drugs in 1970.
Cole told lawmakers prior to his confirmation that advancing the rescheduling process, initiated by the Biden Administration but since stalled under President Trump, is one of his top priorities.
That’s the good news.
The not-so-good? He has a long track record of anti-cannabis statements and refused to give direct answers about what outcome he wants for the process. He’s playing it close to the chest.
Then came a twist: Just one day after Cole’s confirmation, the DEA’s administrative law judge overseeing the rescheduling process, John Mulrooney, announced his retirement. In a letter, he said all matters now go straight to the DEA Administrator. That’s Cole.
The cannabis industry is cautiously spinning Cole’s appointment as a win. That’s mostly because it’s been starving for any federal progress. Hearings were supposed to begin in January but quickly got bogged down by procedural fights, witness disputes, and a general lack of urgency.
So now, he has two choices:
- Finalize the rescheduling recommendation and jam it through himself — unlikely, but possible.
- Appoint a new judge and restart hearings from scratch. That would mean more delays and more dysfunction. More on that below.
If rescheduling happens, the implications are massive, especially for cannabis businesses.
The biggest shift? Eliminating IRS Code 280E, a tax rule that bars cannabis operators from deducting normal expenses like payroll, rent, and office supplies. That rule has gutted balance sheets and pushed even profitable companies into the red.
Rescheduling could also unlock access to banking, ease mergers and acquisitions, and possibly even allow U.S. cannabis firms to list on major stock exchanges — though it’s unclear if Nasdaq or NYSE would permit that under Schedule III.
For social equity operators, it could be a lifeline. States like New York and Illinois established these licensing programs to give entrepreneurs harmed by the War on Drugs a first crack at the newly legal market. But the lack of federal reform and banking access has left many undercapitalized, buried in debt, and unable to open. New investment and lower capital costs could give them some breathing room.
But here’s the rub: Many grassroots advocates worry Schedule III could cement the dominance of deep-pocketed multistate operators like Curaleaf and Green Thumb Industries that cultivate and sell cannabis in multiple states. These companies already have the compliance teams, legal firepower, and capital to navigate federal ambiguity — and now, potentially, tax relief too.
Rescheduling doesn’t legalize cannabis. It doesn’t expunge records. And it technically wouldn’t stop federal agencies from hassling state-legal operators if they wanted to. It just makes the math easier — for the businesses that are already surviving.
Trump has political reasons to move on cannabis reform. He backed rescheduling during the campaign — meaning it would be a fulfilled campaign promise — and it could distract from Epstein file fallout and DOJ scandals. More importantly, he’s hemorrhaging Gen Z support, and they overwhelmingly back cannabis reform.
It also gives Trump a way to split the difference in his big-tent party. It’s not full legalization (which could trigger backlash from the religious Ron DeSantis/Mike Johnson wing), but it is a policy win that helps small American businesses, plays well with young voters, and looks like reform and a broadly popular issue without going all the way.
It’s a politically useful half-measure. But in this administration, it might be the best we get. Now that Judge Mulrooney’s out, the ball is squarely in Cole’s court.
Will he push it through? Or slow-walk it into oblivion? The industry’s watching. Closely.
Editor’s note: Check out more of Jeremy’s work over at Cultivated — one of our favorite sources for smart, nuanced cannabis coverage.
Photo by Thom Milkovic on Unsplash
