The First Winners of Rescheduling

I have been asked a few times what I think about last week's announcement that DEA has now granted federal registrations to more than 900 medical marijuana dispensaries. What we are seeing is the beginning of a federal, potentially interstate program. Medical marijuana has moved into Schedule III and now has a pathway into the federal system, while the much larger adult-use industry remains in Schedule I, waiting for the broader rescheduling process to play out and likely disallowed from participating for quite some time.

According to the Department of Justice's October 30 press release, "Justice Department Announces Issuance of Federal Registrations for Medical Marijuana Dispensaries", DEA has begun issuing registrations to more than 900 dispensaries in Alabama, Florida, Mississippi, South Dakota, Texas, Virginia and West Virginia. This is only the first round. DEA says it will continue processing applications, and nearly 7,000 marijuana businesses filed timely applications, including more than 4,000 dispensaries.

Who the first registrations are going to

It is important to note that we are not talking about 900 separate companies. DEA has not released the names of the companies behind each registration, so we cannot know yet how concentrated the first round is. However, Florida gives us a pretty good idea. Florida has hundreds of dispensaries controlled by a relatively small number of companies. Trulieve alone currently lists 172 Florida locations. Earlier this year, Florida reported 169 Trulieve locations, 85 MÜV locations, 73 Curaleaf locations, 66 AYR locations and 45 Surterra locations. Those five companies alone operated more than 400 stores.

My guess is that these first 900 registrations belong to somewhere around 75 to 125 actual companies, and I think fewer than 100 is entirely possible. We will know more as DEA releases additional information, but I also expect this first round to tilt heavily toward Florida.

The Trulieve connection

Trulieve is especially interesting because of the role its CEO, Kim Rivers, played in pushing President Trump to act on marijuana policy. Forbes covered that effort in Will Yakowicz's April article, "Meet The Cannabis Industry's Trump Whisperer", describing Rivers as instrumental in getting Trump to act on marijuana rescheduling. Rivers met with Trump, maintained that relationship after Florida's adult-use ballot measure failed, participated in White House meetings and was in the Oval Office as the case for rescheduling was made directly to the president. Forbes reports that Trump made up his mind during one of those meetings and directed his staff to begin drafting the order.

Trulieve is based in Florida, dominates the Florida medical market and now stands to be one of the largest beneficiaries of the federal medical program that followed. Those are simply the facts.

What federal registration unlocks

For all intents and purposes, these are now federally legal marijuana businesses. These companies should now be able to pursue the same lending opportunities available to other legal companies, while most of the cannabis industry remains locked out.

I wrote about this a few days ago in my article, "From Handshake Deals to Bank Financing". Access to debt gives a business options. A company can finance real estate instead of tying up its cash, refinance expensive private debt, fund acquisitions, open new locations, buy equipment and use leverage to grow much faster than it could by relying only on cash flow. The cannabis industry has spent years without those tools.

Several of the companies positioned to benefit are already enormous multi-state operators with management teams, infrastructure, capital and scale. They now have an opportunity to build balance sheets, borrow money and expand while competitors in adult-use states continue operating under Schedule I. Approximately 75% of the industry is located in mixed or adult-use states and remains outside this federal system.

Who is being left out

We know mixed-use operators are being excluded because DEA has already said so. Marijuana Moment covered the issue in Tom Angell's October 30 article, "DEA Refuses To Approve Marijuana Businesses In States That Allow Dual Medical And Recreational Licensing". Marijuana Moment reports that DEA rejected the application of In-Dispensary in Minneapolis because Minnesota uses a dual-purpose license that permits both medical and non-medical dispensing. DEA said that type of license falls outside the federal definition of a state medical marijuana license. DEA went further and said allowing medical and recreational dispensing under the same license creates diversion because non-medical marijuana remains federally prohibited.

That leaves states like Oregon, Colorado, California, Michigan and others on the outside. Businesses in those states followed the systems their states created. They got licensed, paid taxes, built compliance systems and operated in regulated markets. Now companies in medical-only states are being brought into the federal system while businesses in mixed markets remain excluded.

Virginia's version of the story

Virginia is another great example of how the game may be rigged. Virginia's medical market is controlled through five licenses held by just four parent operators: AYR, Jushi Holdings, Green Thumb Industries and Verano. AYR controls two of the five. The Virginia Cannabis Control Authority identifies those operators on its medical cannabis processor page.

After Todd Blanche's April 23, 2026 order created the new federal Schedule III pathway for medical marijuana businesses, Virginia lawmakers passed another adult-use bill. Governor Abigail Spanberger vetoed it on May 19, 2026.

Virginia ultimately approved a different framework in June, but adult-use sales will not begin until July 1, 2027. In the meantime, those four existing medical operators are positioned to participate in the new federal system while businesses in states that already built mixed medical and adult-use markets are being rejected by DEA. If I were one of the Virginia voters who watched the state delay its adult-use market again while four existing medical operators received this federal advantage, I would be pretty ticked off.

Where rescheduling stands

The broader rescheduling process is still not finished. Judge Derek Julius recently is allowing additional briefing on a Government Accountability Office report. Final replies are due November 5. After that, Julius can issue his recommendation on whether marijuana should move from Schedule I to Schedule III. Assuming political decision-making is based entirely on logic, the courts move efficiently and politicians always have our best interests in mind, adult-use marijuana should be rescheduled before the end of the year.

I am not counting on it. Even if Judge Julius recommends Schedule III, there are still opportunities for more process, more review and more delay before the broader rule becomes final. The IRS has been adamant that §280E continues to apply until marijuana is actually rescheduled. Every month the process continues is another month that adult-use operators remain in Schedule I while these newly registered medical companies move forward under Schedule III.

Maybe the government surprises me and finishes this before year-end. I hope it does. But if the process slips into 2027, the first group of federally legal medical cannabis companies will have a runway to use advantages that most of the industry still does not have.

The writing was on the wall. Medical marijuana was going to get through the door first. We are now starting to see who the first winners of rescheduling are, and who is still being asked to wait.