As federal cannabis rescheduling approaches, optimism is growing across the industry. For many, the potential reclassification of cannabis from Schedule I to Schedule III could serve as a catalyst for long-awaited change. Michael DeGiglio, CEO of Village Farms, sees this as a positive step toward the cannabis industry’s transformation, though he believes more is on the horizon.
Speaking at the recent Benzinga Cannabis Capital Conference, DeGiglio emphasized that rescheduling is only the start. It could be the gateway to significant policy reforms that will unlock new opportunities for the entire sector.
Rescheduling: A Major Step Forward
The move to reclassify cannabis under Schedule III could be game-changing for the industry. By recognizing cannabis’s medical value and reducing federal penalties, this shift would provide critical relief for businesses across the board. Rescheduling would also allow cannabis companies to finally deduct regular business expenses, potentially saving millions annually and improving profitability.
For multi-state operators (MSOs) and large cannabis companies, the benefits are immediate. Lower taxes and access to more favorable financing terms would free up much-needed capital for expansion and innovation. The U.S. cannabis market, expected to hit $43 billion by 2025, could see even faster growth with these changes in place.
“The move to Schedule III could unlock more opportunities, but it’s just the beginning of the road to meaningful reform,” DeGiglio said. While rescheduling is a big win, it also sets the stage for future regulatory and financial advancements that could take the industry to new heights.
Momentum Building for Policy Reform
DeGiglio believes that federal cannabis policy is on the cusp of a breakthrough. After years of little progress, rescheduling represents a significant shift in how cannabis is viewed by regulators. This shift could lead to larger conversations about how the U.S. can build a comprehensive regulatory framework for cannabis businesses to thrive.
While some questions remain—such as whether the FDA or another body will oversee regulation—there is optimism that federal rescheduling will open the door for a clear and consistent set of national standards. Such standards would allow cannabis companies to expand across state lines and tap into new markets, driving exponential growth.
“Who’s going to regulate cannabis in the U.S.? Is it going to be the FDA? Where’s that funding going to come from? Is Congress going to be involved?” DeGiglio asked. But rather than seeing these questions as barriers, he views them as signals that the federal government is preparing to seriously engage with cannabis regulation.
Financial Access Could Skyrocket
One of the most promising aspects of rescheduling is the impact it could have on financial access. The cannabis industry, which saw a 66% drop in cannabis-related funding in 2023, could soon have greater access to traditional banking services, making it easier for businesses to secure loans and manage cash flow. The potential passage of the SAFE Banking Act would further boost financial confidence, making it safer for banks to engage with cannabis companies.
“I think many companies need it,” DeGiglio said, referring to the potential tax relief and capital access rescheduling could bring. The ability to secure financing and manage taxes like any other business would provide the runway for expansion and scaling, especially for smaller operators who are currently squeezed by high costs and limited financial services.
Larger, cash-flow-positive businesses would be poised to grow even more rapidly, leveraging their resources to scale operations and increase market share. As the U.S. cannabis industry continues to expand, the long-term opportunities for growth are enormous, with the potential to generate $100 billion in economic activity over the coming years.
Optimism for a Bright Future
Despite the challenges of the past, DeGiglio is optimistic about the future of cannabis. He emphasized Village Farms’ long-term commitment to the industry, noting that while the path to full federal legalization may take time, the potential rewards far outweigh the risks.
“I’m all in, and I’m still the largest shareholder of Village Farms,” he said. As one of the industry’s leading voices, DeGiglio believes that the rescheduling decision, combined with continued regulatory and financial progress, will position the U.S. cannabis market as a global leader.
With the right policies in place, the U.S. could become the world’s largest legal cannabis market, creating a robust environment for innovation, investment, and economic growth. As rescheduling signals a shift in momentum, many in the industry are hopeful that this will lay the foundation for a new era of expansion and success.
“The road ahead is filled with opportunities,” DeGiglio concluded. “And those who are ready to embrace them will reap the rewards.”
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