Last week’s executive order by President Trump to reclassify cannabis as a less dangerous drug is being heralded by Maine’s marijuana industry as “the most progress in cannabis policy in decades.”

But members aren’t ready to celebrate yet.

At face value, reclassifying the drug from Schedule I to Schedule III could be a boon for Maine’s two cannabis markets by opening up more opportunities for research and allowing business owners to deduct ordinary business expenses, something that is currently prohibited for businesses dealing in or “trafficking” schedule I and II substances.

Many in the industry, though, say the directive lacks teeth. It orders the U.S. Attorney General to work faster on a process that has been in the works since May 2024 but does not officially reclassify cannabis immediately.

It also does not legalize the drug, which remains illegal at that federal level, and some fear any changes could open the door for “big pharma” to take over Maine’s craft cannabis industry.

A STEP IN THE ‘RIGHT DIRECTION’

Matt Hawes near the brite tanks at his Novel Beverage Co. facility in Scarborough in July 2023: Hawes is the head of the Maine Cannabis Industry Association and owner of Novel Beverage Co., which makes THC-based drinks. (Shawn Patrick Ouellette/Staff Photographer)

Matt Hawes, a founding member of the Maine Cannabis Industry Association, said he’s approaching the executive order with a sense of “cautious optimism.”

“It does appear to be another step in the direction of more appropriately placing this in the social and legal framework of our society,” Hawes said. “It has always been impossible to rationalize it as a schedule I drug. It’s still hard to rationalize it as a schedule III.”

Schedule I drugs are the most dangerous, meaning they have high abuse potential with no accepted medical use. Heroin and LSD are also schedule I drugs.

Schedule III drugs, which include ketamine and Tylenol with codeine, have recognized medical uses but moderate to low potential for abuse.

It’s the most progress in cannabis policy in decades, he said, and will allow more research opportunities that have so far largely been stymied by the government’s Schedule I designation. 

Scientists have long described the problem as a catch-22: They can’t conduct research on cannabis until they demonstrate it has a medical use, and they can’t show the plant has a medical use until they conduct research.

In 2018, state statute established a medical cannabis research grant program, which authorized the department to provide grant money from the state’s Medical Use of Cannabis Fund to “support objective scientific research” on the plant’s medicinal uses. 

So far, that fund has gone untapped, but that could change with a new designation, McCarrier said.

“Maine has another opportunity to be a leader in the cannabis industry and we should not waste it,” he said.

The Maine Office of Cannabis Policy, the state’s regulatory agency, said reducing barriers to research and the “significant tax relief” that would come from allowing tax deductions are the only two changes the program is likely to see. 

“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,” the agency said last year after the Biden administration announced plans to reclassify the drug.

A LOT TO LOSE

Tax deductions will of course create “improvement in the bottom line” for small businesses, but the change should not be seen as a win for the industry, said Mark Barnett, policy director for the Maine Craft Cannabis Association.

Rather, he said, “it’s removing something that is a truly grotesque abuse of the businesses that operate in this space.” 

Barnett is hopeful that the government will eventually de-schedule the drug, which he said is the “only legal, only realistic interpretation of this agricultural product.” 

But he’s also wary that the Trump administration will try to intervene in a program that has historically been left to the states to manage. 

“It won’t matter if you’re in the medical market, it won’t matter if you’re in the adult-use market, it won’t matter if you’re in the CBD market. We all stand to lose a lot through federal involvement in cannabis policy,” he said. 

That’s also why Hawes, of the Maine Cannabis Industry Association, isn’t more enthusiastic.

“There’s still plenty of unknowns related to this situation, but we know we’re introducing a new regulatory agency in the FDA and it’s unclear what types of regulations they may impose,” he said.

If they continue to defer to the state, the long-running small business model will likely continue.

“If they come in with an iron fist stance that everything has to be done in an FDA licensed facility,” however, “the investments that it would take to achieve those standards are likely unattainable for any business in Maine,” he said.

Hawes added that the news of possible reclassification is just the latest in what has been a “dizzying” few weeks for the cannabis industry, which is also contending with the effective re-criminalization of hemp and dealing with recent recalls of recreational product and plateauing sales. There is also a referendum petition to close the recreational market and ongoing legislative efforts to increase oversight of the medical market.