PHOENIX (AZFamily) — A decision being weighed in Washington could have significant ripple effects for Arizona’s cannabis industry, one of the largest markets in the country.

President Trump says he’s strongly considering an executive order to reclassify marijuana as a less dangerous drug.

While medical and recreational marijuana are already legal in Arizona, the potential federal policy shift could bring major changes to how cannabis businesses operate.

Currently, marijuana sits in the federal government’s most restrictive drug category, Schedule I. Reclassification would move it to Schedule III, a less dangerous tier alongside some of the most common prescription painkillers.

Financial relief for dispensaries

At Mint Cannabis, a Valley chain of dispensaries, customers browse products and budtenders explain different strains as business continues as usual. But industry leaders are closely watching developments in Washington.

“This is just a reclassification from a schedule one drug, which means it’s a drug that has zero benefits to the human body, to a schedule III, which now they’re acknowledging that it has some health benefits,” said Raul Molina.

For dispensaries, that shift could mean substantial financial relief. Molina says the most immediate impact would eliminate a federal tax burden that has long squeezed cannabis businesses.

“Probably the biggest and the most initial impact that everybody’s going to feel it’s going to eliminate 280E,” Molina said. “280E is a tax that’s levied on the cannabis industry that charges 40% off the gross margins.”

The federal tax code has limited growth and innovation in the cannabis sector, according to industry representatives.

Research opportunities expand

Reclassification could also open doors for scientific research that has been restricted under current federal scheduling.

“There’s like thousands of cannabinoids in the cannabis plant, and we don’t know what probably the majority of them do,” Molina said.

That research could help answer questions customers already have about effectiveness and safety.

“Marijuana does help, but it also does have its disadvantages at times too. But I feel like they definitely do need a little bit more studying for it,” said Josiah Anglin.

Banking access improvements

Anglin says understanding the product matters, and so does convenience. Reclassification could loosen banking restrictions, allowing dispensaries to borrow from banks and accept more forms of payment beyond the current cash-heavy system.

“It would be a lot easier to pay with the bank instead of, you know, having to come in and pull at the ATM, because the ATM really only pulls 20s, you know, in case you don’t got it at times like that,” Anglin said.

The potential changes would move Arizona’s cannabis industry away from all-cash transactions that have been standard since legalization.

See a spelling or grammatical error in our story? Please click here to report it.

Do you have a photo or video of a breaking news story? Send it to us here with a brief description.

Copyright 2025 KTVK/KPHO. All rights reserved.