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What a Potential Second Trump Presidency Would Mean for the Cannabis Sector by Anthony Coniglio

While it’s unlikely that a second Trump presidency would actively seek to undo a finalized cannabis rescheduling, there may be a lack of urgency to expedite the process shortly after an inauguration. On the legislative front, the outlook is somewhat different. 

Trump’s approach suggests that he may not stand in the way of any cannabis legislation that reaches his desk, particularly if it enjoys bipartisan support. However, the political landscape, characterized by potential split houses or narrow majorities in Congress, adds a layer of uncertainty to the prospects of bipartisan support and legislative action. 

Critical Elements in Threes

As we watch the rescheduling process unfold, everyone is asking whether it will be done before the Election in November. Many also want to know if Donald Trump, the presumptive Republican nominee, wins in November, what impact he can have on the process.

To answer this question, we need to look at three elements of the analysis: 

1) Define “done”

2) Identify when “done” happens 

3) Assess which party controls the next Congress   

When saying the rescheduling process is complete, it is important to have some precision in describing it. There are three ways to define the process as “complete”: 

1) Notice of Final Rule

2) Effective date of the Final Rule, which is generally 30 days after publishing

3) The date that is after the Congressional Review Act look-back period    

As each milestone occurs, the ability to undo a rescheduling to Schedule III greatly diminishes. Focus on the Notice of the Final Rule because that milestone provides the most meaningful boost to the likelihood of permanency.

At that point, the heavy lifting is complete. The cannabis industry is through the comment period, beyond hearings, and the Drug Enforcement Administration (DEA) and the Department of Justice (DoJ) have done the arduous work of reviewing and addressing all the comments received. Getting past this point significantly increases the likelihood of effectiveness.

While it is possible the process could encounter issues during the Office of Management and Budget review or possibly a congressional review of the Final Rule, the odds of those undoing more than two years of work by the Department of Health and Human Services (HHS) and the DoJ are very low. Additionally, litigation could seek a stay on implementing the Final Rule. Still, precedent suggests that the courts will make meaningful deferences to the administrative agency’s decision. So, this is not likely a big risk to undoing rescheduling.

Predicting the Final Rule Publication

Now, focus on when a Final Rule can be published in the Federal Register. There are three scenarios: 

1) Happens before the election

2) Happens between election and inauguration

3) Doesn’t happen by the inauguration 

Some speculate that the political strategists on Biden’s team have this dialed in to become a final rule by the Democratic Convention in August or shortly before the election in October. 

Notwithstanding the political desires, the DEA is following protocol and process as laid out in the various statutes governing the rescheduling process. While there may be political pressure, the process takes time to play out and the comment period ends on July 22nd.  

Assuming no extensions or hearings are granted, the Final Rule will take months to complete as the DEA will need to address the comments received. There were nearly 5,000 comments in the first three days, and most experts expect thousands more to be submitted.

Based on reviewing previous rescheduling timelines, it is reasonable to expect the process from closure of the comment period to publication of a Final Rule to be four to six months. Therefore, the estimated publication of a Final Rule would happen between the election and the inauguration.  

Cannabis Final Rule in a Trump Presidency

In this scenario, we assume Trump wins in November. If the Final Rule is published by the time he takes office, there appear to be only two ways Trump could undo rescheduling. 

One is to ask HHS and DEA to reevaluate and move back up. It’s highly unlikely that new data would come out so close to the rescheduling, and it would probably do more damage to the credibility of the agencies involved, so this is an unlikely scenario. 

The other is to use the Congressional Review Act, which allows Congress to overturn a final rule issued by a federal agency. Concerning a new administration, a lookback provision allows a new Congress time to review rules made in the closing days of the previous congressional session. However, it would require a majority of both houses of Congress to send the President a joint resolution of disapproval to overturn the rescheduling.

Therefore, even if Republicans retained the House and won back the Senate, they still need to close ranks and all vote for disapproval since most, if not all, of Democrats would likely vote against. Given the 69% of American voters’ approving legalization in a recent Fox News poll, it is doubtful Republicans will be looking to make this one of their early legislative objectives.  

Lastly, there is a scenario where a Final Rule is not published by the time of inauguration on January 20, 2025. This is where Trump could have an impact on rescheduling.

In this instance, you would likely have a new Attorney General and potentially a new DEA Administrator. Either could make publishing a Final Rule a lower priority and delay the process. It’s hard to know for how long or if they decide to request more input, but this scenario creates the most significant risk to finalizing the rescheduling.

Having said that, this scenario is more of an elongated delay versus a complete undoing of the work that the DOJ, DEA, and HHS had done. When evaluating the various steps, looking to precedent and understanding intent, we start to see a window of opportunity to finalize rescheduling before the inauguration, with a potential Trump presidency having an impact more on the ultimate timing than the ultimate outcome. 

This opinion piece is part of the upcoming print edition of Cannabis & Tech Today.

Photo by Scottsdale Mint on Unsplash

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