🌿 Trump’s Marijuana Policy Shift: What It Means for Hemp, Cannabis & Commercial Real Estate 🏢

🏗️ Cannabis Rescheduling Could Unlock Billions for CRE: Hemp, Dispensaries & Industrial Space 🌿

What Trump’s Marijuana Policy Shift Means for the Legal Hemp Industry—and Commercial Real Estate

President Donald Trump has issued an executive order directing the reclassification of marijuana from a Schedule I drug to Schedule III. While this action does not federally legalize marijuana, it represents one of the most consequential federal drug policy shifts in decades—and it has direct implications for the legal hemp industry and commercial real estate.

For commercial property owners and investors, this move signals a potential inflection point in lending access, leasing risk, zoning flexibility, and tenant demand across retail, industrial, and specialized-use real estate.

Schedule III: Why This Matters

Moving marijuana to Schedule III places it alongside substances recognized as having accepted medical use. While interstate commerce and federal legalization remain off the table, rescheduling materially changes how the industry is treated from a tax and regulatory standpoint.

Most importantly, Schedule III eliminates the application of IRS Section 280E, which has long prevented cannabis operators from deducting ordinary business expenses such as rent, payroll, utilities, and insurance.

Immediate Impact: Tax Relief = Stronger Tenants

Under Section 280E, many cannabis operators paid effective tax rates exceeding 70%. With rescheduling, operators revert closer to the standard 21% corporate rate.

Industry research estimates cannabis companies paid more than $2.3 billion in excess federal taxes in 2024 alone. Removing that burden significantly improves:

·Tenant profitability

·Creditworthiness

·Ability to sign longer leases

·Capital reinvestment into facilities and expansion

For landlords, this translates into lower default risk and a more stable tenant base.

Commercial Real Estate Implications

1. Retail Leasing Expansion

Major operators such as Cresco Labs, Curaleaf, and Trulieve already operate hundreds of dispensaries nationwide. Improved margins and reduced regulatory stigma could accelerate:

·New retail site selection

·Conversion of underutilized strip centers

·Re-tenanting of formerly “non-bankable” spaces

As legal risk perception declines, more landlords—particularly those with institutional debt—may be willing to lease to cannabis tenants.

2. Industrial & Flex Space Demand

Beyond retail, rescheduling benefits cultivation, processing, testing, and distribution facilities. These uses favor:

·Industrial warehouses

·Flex/industrial campuses

·Specialized HVAC and power-intensive buildings

For hemp operators in particular—already federally legal under the 2018 Farm Bill—this policy shift further legitimizes adjacent cannabis infrastructure, increasing investor appetite for specialized industrial assets.

3. Lending & Capital Markets: A Slow but Meaningful Shift

While rescheduling alone does not force banks to lend, it opens the door for clearer guidance from the Treasury and Justice Departments. Until then, many traditional lenders remain cautious.

That said, the direction of travel is clear:

·More private credit participation

·Improved underwriting confidence

·Potential future bank entry

Once banks fully engage, cap rates, valuations, and transaction volume could reset meaningfully.

Zoning & Municipal Considerations

Municipal zoning restrictions—such as distance requirements from schools or churches—remain locally enforced. However, legal experts expect some jurisdictions to revisit restrictive policies now that marijuana is no longer categorized alongside heroin at the federal level.

This creates opportunities for:

·Adaptive reuse projects

·Rezoning plays

·Early-mover landlord advantages

Hemp Industry Spillover Effects

The legal hemp industry stands to benefit indirectly through:

·Normalized banking relationships

·Shared infrastructure investment

·Expanded research and product development

For commercial real estate investors, hemp processing, CBD manufacturing, and related logistics facilities may see increased institutional interest.

Industry Response

Trade groups like the National Cannabis Industry Association have called the move a foundational reform. Operators including Verano Holdings describe it as a necessary step toward normalized capital access, medical research expansion, and long-term industry stability.

What CRE Investors Should Watch Next

·Treasury and DOJ banking guidance

·State-level zoning changes

·Institutional lender policy shifts

·Sale-leaseback activity

·Industrial redevelopment demand

Bottom Line for Commercial Real Estate

Trump’s marijuana rescheduling order does not flip a switch overnight—but it meaningfully de-risks cannabis and hemp tenants. For commercial real estate investors, this is not a cultural issue; it is a capital markets and tenant-credit story.

As tax burdens fall and financing pathways slowly open, cannabis-adjacent real estate could move from fringe to mainstream—creating both opportunity and competition for well-located assets.

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© 2023-2024 Bill Rapp, Broker Associate, eXp Commercial Viking Enterprise Team