- Rescheduling Progress: Marijuana rescheduling from Schedule I to Schedule III could ease tax burdens (280E), improve research opportunities, and enhance consumer trust in cannabis products.
- Bipartisan Support: Both major 2024 presidential candidates backed cannabis reform, signaling potential future growth, but regulatory actions under President-elect Trump remain uncertain.
- Banking Challenges Persist: The SAFER Banking Act failed to pass, leaving cannabis businesses reliant on cash transactions, increasing costs, and security risks.
- Hemp Product Scrutiny: Debates on regulating Delta-8 THC and other hemp-derived cannabinoids highlight the need for compliance and consumer education.
- Agency Actions Matter: DEA rescheduling hearings, IRS tax restrictions, and USDA testing delays reflect the complex regulatory landscape cannabis operators must navigate.
The cannabis industry is no stranger to navigating a maze of regulatory challenges, and 2024 was a year that added both opportunities and obstacles for cannabis retailers and operators. With significant developments in federal marijuana policy—including rescheduling efforts, stalled banking reform, and evolving hemp regulations—businesses must stay informed to adapt and thrive in an ever-changing landscape.
Here’s a closer look at the federal marijuana policy shifts of 2024 and their implications for cannabis professionals.
A Step Toward Mainstreaming Cannabis Through Federal Rescheduling
The U.S. Department of Health and Human Services (HHS) recommended reclassifying marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA) in 2024, signaling a potential game-changer for the industry. Rescheduling could ease research restrictions, address taxation challenges, and pave the way for broader acceptance of cannabis in mainstream markets.
Implications for Retailers and Operators:
- Tax Relief: Moving to Schedule III would exempt businesses from the IRS’s 280E tax provision, reducing tax burdens and freeing up resources for growth.
- Research Opportunities: Retailers could gain access to federally supported research, enabling the development of more targeted, effective products.
- Consumer Confidence: A rescheduling could enhance public trust by positioning cannabis as a legitimate therapeutic option.
What to Watch: The Drug Enforcement Administration (DEA) will continue administrative hearings into 2025, with final decisions expected under the new administration.
Presidential Shifts and Federal Leadership
For the first time, both major presidential candidates in 2024—Vice President Kamala Harris and President-elect Donald Trump—expressed support for cannabis reform. While this bipartisan acknowledgment of cannabis as a key policy issue is promising, the incoming administration’s actions will determine the trajectory of federal policy.
Key Takeaways for Businesses:
- Potential Growth Opportunities: Support from federal leadership could open doors for new markets and reduce stigma.
- Cautious Optimism: Trump’s cabinet picks reveal diverging views on cannabis, indicating possible delays or policy inconsistencies.
What to Watch: Federal appointments, including those to the DEA, FDA, and DOJ, will heavily influence enforcement and regulatory direction in 2025.
Progress Stalled Again by The SAFER Banking Act
Despite bipartisan support, the Secure and Fair Enforcement Regulation (SAFER) Banking Act once again failed to pass in Congress, leaving cannabis businesses in financial limbo. Many operators continue to rely on cash transactions without access to traditional banking services, increasing operational risks.
Challenges for Retailers and Operators:
- Higher Costs: Cash-heavy operations are expensive to maintain and limit scalability.
- Safety Concerns: Businesses and employees remain vulnerable to theft and security issues.
- Missed Opportunities: Lack of banking reform restricts access to loans and financial tools critical for expansion.
Looking Ahead: The SAFE Banking Act remains a legislative priority, with the potential to reemerge in the new Congress.
Navigating Hemp Regulations
Hemp-derived products like Delta-8 THC faced increased scrutiny in 2024, with lawmakers considering stricter regulations to address safety concerns and close perceived legal loopholes. While no federal decisions were finalized, these discussions highlight the ongoing challenges of managing hemp markets.
Impact on Cannabis Operators:
- Product Innovation: Businesses must anticipate regulatory changes and adapt by developing compliant products.
- Education Is Key: Operators should invest in consumer education to build trust and highlight the benefits of lab-tested products.
- Market Uncertainty: Potential bans on hemp-derived cannabinoids could disrupt inventory planning and sales strategies.
What to Watch: The 2025 Farm Bill will likely include significant provisions on hemp product regulation.
A Mixed Bag of Influence Through Federal Agency Actions
Several federal agencies made headlines with cannabis-related actions in 2024, creating a patchwork of regulatory changes that directly affect retailers and operators.
Notable Agency Developments:
- DEA: Rescheduling hearings continue, with criticism over delays and procedural missteps.
- USDA: Enforcement of hemp testing rules was delayed, complicating compliance for producers and retailers.
- IRS: Reinforced restrictions on tax deductions under 280E, keeping financial pressure on cannabis businesses.
- VA: Continued limitations on medical marijuana recommendations for veterans.
What This Means for Operators: Staying informed about agency actions is crucial for maintaining compliance and avoiding costly disruptions.
SB 494 Reshapes Cannabis Compliance for Georgia Retailers
In 2024, Georgia passed SB 494, a landmark bill that introduced a comprehensive regulatory framework for hemp products. This new law requires cannabis retailers and distributors to obtain licenses, adhere to strict packaging and advertising rules, and sell only products approved by the Department of Agriculture.
SB 494 aims to bring clarity and structure to the state’s cannabis market, reducing the risk of law enforcement misunderstandings that previously led to raids and arrests. While products like THCa flower are now prohibited, the law explicitly permits compliant gummies, vapes, and non-alcoholic beverages, providing opportunities for businesses to grow within clear guidelines.
What to Watch For:
- Compliance Deadlines: Retailers must apply for licenses by January 1, 2025, and comply with packaging rules, including QR-coded COAs from approved labs.
- Enforcement Trends: After the 90-day grace period, expect increased inspections and possible fines for noncompliance, though civil penalties may replace criminal enforcement.
- Future Legislation: The 2025 legislative session could bring additional changes, including potential milligram limits or expanded product allowances, so staying informed will be crucial.
For a deeper dive into SB 494 and what it means for Georgia cannabis operators, check out our full High Profit episode featuring attorney Tom Church.
Cannabis Compliance Shifts for Tennessee Businesses
Tennessee’s evolving cannabis regulations present both challenges and opportunities for retailers. Alex Little, a leading cannabis attorney, stresses compliance is key to success in 2025. From accurate labeling and robust record-keeping to partnering with compliant distributors, staying ahead of the Department of Revenue and Department of Agriculture enforcement efforts is critical.
Little highlights the importance of adhering to Tennessee’s strict 25-milligram-per-serving THC limit and ensuring products are either behind the counter or in locked displays. With inspections increasing in the new year, he warns that even minor violations could escalate into costly fines or license revocation, urging retailers to take compliance seriously.
What to Watch For in 2025:
- Increased Inspections: Retailers should anticipate more frequent compliance checks, especially on labeling accuracy and THC limits.
- Professionalization of the Industry: Adopting practices like thorough record-keeping and partnering with compliant distributors will be essential for success.
- Enforcement Trends: Expect stricter action against operators who fail to meet new regulatory standards.
Curious to hear more insights from Alex Little on navigating Tennessee’s cannabis laws? Check out the full interview on the latest episode of High Profit for an in-depth discussion!
What’s Next in 2025 for Cannabis Retailers?
As the cannabis industry transitions into 2025, businesses must prepare for both opportunities and challenges stemming from federal marijuana policy. Rescheduling efforts, banking reform, and evolving hemp regulations will shape the market landscape in the coming years.
Actionable Steps for Retailers and Operators:
- Stay Agile: Monitor regulatory updates and adapt business strategies accordingly.
- Prioritize Compliance: Ensure all products meet current legal standards and are third-party tested.
- Engage in Advocacy: Collaborate with industry groups to influence policy and promote fair regulations.
- Build Consumer Trust: Highlight transparency, safety, and quality to differentiate your brand in a competitive market.
Embracing Change in an Evolving Industry
The federal marijuana policy developments of 2024 have set the stage for transformative shifts in the cannabis industry. While progress has been uneven, the momentum is undeniable. For cannabis retailers and operators, staying informed and proactive is key to navigating these changes and seizing new opportunities.
By focusing on compliance, consumer trust, and strategic growth, businesses can thrive in an industry poised for significant expansion. As always, Kush.com supports operators with high-quality, lab-tested products that meet evolving standards.
Stay ahead of the curve—because the future of cannabis is happening now
Tyana Daley
