The Oval Office Deal: Trump's $32B Cannabis Gamble

Breaking: The December 10 Oval Office Meeting

On Wednesday, December 10, 2025, President Donald Trump held a meeting in the Oval Office that could reshape the $32 billion U.S. cannabis industry. According to the Washington Post, Trump informed House Speaker Mike Johnson via phone call that he intends to issue an executive order directing federal agencies to move marijuana from Schedule I to Schedule III of the Controlled Substances Act.

The meeting wasn't just another DC photo-op. Present in the room were:

• Kim Rivers – CEO of Trulieve Cannabis, who donated $750,000 to Trump's inauguration
• Charlie Bachtell – CEO of Cresco Labs, chair of the newly merged U.S. Cannabis Roundtable
• Robert F. Kennedy Jr. – Secretary of Health and Human Services
• Dr. Mehmet Oz – Administrator of Centers for Medicare & Medicaid Services

According to MJBizDaily, Trump called Johnson during the meeting to inform him of the decision. Johnson, a known cannabis reform opponent, reportedly expressed his opposition but was told the decision was already made.

What Schedule III Means: The 280E Tax Bomb

Right now, cannabis is classified as a Schedule I controlled substance—the same category as heroin and LSD. This classification triggers Internal Revenue Code Section 280E, which prohibits cannabis businesses from deducting normal operating expenses like payroll, rent, and utilities from their federal taxes.

The result? Effective tax rates of 70% or higher for most operators. For the largest cannabis companies, this burden includes paying more than $100 million per year in federal taxes that they otherwise wouldn't owe in any other legal industry.

The Pay-to-Play Reality

This decision didn't happen in a vacuum. Federal campaign finance records show the cannabis industry has been heavily investing in Trump-aligned causes:

• $1 million from the American Rights and Reform PAC (cannabis-funded) to Trump's MAGA Inc.
• $750,000 from Trulieve to Trump's inaugural committee
• $250,000 from the U.S. Cannabis Roundtable

Kim Rivers has been particularly close to Trump. She attended his inauguration in January, was present at the $1 million-per-plate fundraiser at his New Jersey golf club in August, and publicly stated that "President Trump's endorsement represents a sea change in cannabis policy."

The Opposition: Not Everyone's Celebrating

While Big Cannabis celebrates, opposition is mounting from multiple fronts:

The Prohibitionists

Kevin Sabet's Smart Approaches to Marijuana (SAM) warned that rescheduling would give "tax breaks to big marijuana companies" while increasing health risks. Sabet's group has been working with Republican lawmakers to introduce legislation that would maintain 280E restrictions even if rescheduling occurs.

GOP Senators Fight Back

Senators James Lankford (R-OK) and Pete Ricketts (R-NE) filed the "No Deductions for Marijuana Businesses Act" in February 2025, which would extend 280E restrictions to Schedule III substances. The bill explicitly states that marijuana businesses should not receive "federal tax breaks."

House Speaker Johnson's Resistance

During the December 10 call, House Speaker Mike Johnson reportedly expressed his opposition to rescheduling. Johnson is a known cannabis reform opponent, and his resistance signals potential congressional pushback.

The Irony: Hemp vs. Big Cannabis

Here's where Trump's cannabis policy gets truly bizarre. Just one month ago, on November 12, 2025, Trump signed legislation that effectively bans most hemp-derived THC products—Delta-8, THCA flower, and hemp beverages. This move destroyed a $28 billion industry that employed over 300,000 people.

Now, Trump is preparing to give massive tax relief to licensed cannabis operators who compete directly with the hemp industry he just killed. The message is clear: Big Cannabis wins. Small hemp businesses lose.

Stock Market Goes Wild

Cannabis stocks jumped on the news. Trulieve shares surged nearly 27% to $6.50 per share on Monday, August 11, after initial reports of Trump's consideration. When the Washington Post broke the Oval Office meeting story on December 11, shares jumped again.

Other publicly traded companies saw double-digit gains:

• Canopy Growth & Tilray Brands: Up nearly 20% in premarket trading
• Aurora Cannabis: +13.7%
• Cronos Group: +9.5%
• AdvisorShares Pure U.S. Cannabis ETF: Skyrocketed 25.2%

But Will It Actually Happen?

Despite the hype, significant roadblocks remain:

The White House Denies… Sort Of

A White House spokesperson told Marijuana Moment on December 11 that "no final decisions have been made on rescheduling of marijuana." This carefully worded statement doesn't deny the plan exists—just that it's not finalized.

Trump Can't Do It Alone

Trump cannot unilaterally reclassify marijuana. However, he can direct the Department of Justice to forgo the ongoing administrative hearing and issue a final rule. The DEA process, initiated under Biden in October 2022, has been stalled since Trump's inauguration in January 2025.

Timeline Uncertainty

The Washington Post's sources noted that Trump "could still change his mind" and that "the exact plan isn't yet finalized." Trump has a history of announcing policies that don't materialize. In August, he said a decision would come within "a few weeks." It's now December, four months later.

What Happens Next?

Winners and Losers

The Bottom Line

Trump's potential rescheduling decision is historic—but it's not cannabis legalization. It's a massive tax break for an industry that paid millions to access the Oval Office. If executed, this would be the biggest shift in federal cannabis policy in 50 years.

But the contradictions are glaring. Trump just destroyed the hemp industry and is now preparing to save Big Cannabis. He's giving tax relief to multi-state operators while federal law still criminalizes possession in most contexts. And he's doing it all after accepting millions in donations from the very companies that will benefit most.

The question isn't whether Trump will follow through—it's whether he can navigate the opposition from his own party, potential lawsuits from GOP attorneys general, and the reality that he can't just wave a magic wand and change federal law.

One thing is certain: The $32 billion cannabis industry is holding its breath. And if history is any guide with Trump, anything can happen.

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