Medical cannabis and psychedelic improvements reshape mental health markets

A new era for cannabis?

Federal steps toward rescheduling begin in May 2024. Still, an interim appeal postponed a year ago left the process in limbo until Acting Attorney General Todd Blanch signed off. last order Placing state-licensed medical cannabis on Schedule III on April 23.

Shortly thereafter, the DEA announced that it would begin accepting applications for federal protection from medical cannabis businesses. DOJ also Said That a new administrative hearing will begin on June 29 to address the broader rescheduling of “all cannabis.”

For major operators like Curaleaf Holdings (CSE: CURA), Green Thumb Industries (CSE: GTII, OTCQX: GTBIF), Cresco Labs (CSE: CL, OTC: CRLBF) and Trulieve Cannabis (CSE: TRUL, OTCQX: TCNNF), the primary catalyst is the removal of the Section 280E tax burden.

Treasury Department and Internal Revenue Service Said They expect the rescheduling of cannabis will have “significant positive tax consequences for businesses in the medical marijuana industry”, and will soon issue guidance on how the 280E relief applies.

“Historically, this provision has increased effective federal tax rates by 70 percent or more, disrupting cash flow and distorting financial performance,” Terry Mendez, CEO of Safe Harbor Financial, said in an emailed statement. “Relief from 280E should improve operator liquidity, financial transparency and credit quality, all of which are fundamental to sustainable banking relationships.”

While the move de-risks the medical-cannabis landscape, it leaves in place key regulatory and compliance hurdles: no federal legalization and no tax relief for adult-use providers.

“This does not replace the need for comprehensive federal reform,” Mendez said. “A sustainable solution will require Congressional action, including passage of the SAFER Banking Act, as well as clear and consistent federal guidance that aligns financial services policy with the scale and legality of today’s state-legal cannabis industry.

Fundcana CEO Adam Stettner noted the structural implications.

“The order begins to formalize a federal pathway to medical cannabis within an established regulatory framework, including DEA registration, reporting, and compliance requirements aligned with Schedule III substances.

“This presents a higher bar for operational discipline while signaling to institutional capital that certain parts of the cannabis market are becoming more standardized and financed.

The emerging structure creates a natural opening for platforms like CannaLnx, a HIPAA-compliant, insurer-integrated rail that connects patients, providers, dispensaries, and insurers, making medical cannabis a reimbursable medical benefit.

“Redesignation may reduce friction. It may encourage research and improve physician comfort over time. But it does not, in itself, create the infrastructure needed for a stable, healthcare-integrated market,” said Gennaro Luce, founder and CEO of EM2P2 and CannaLnx. “If policymakers intend to develop cannabis into a legitimate therapeutic category, the next phase of reform should focus on reimbursement pathways, claims infrastructure, and benefits integration.”

However, Spherex’s Ryan Hunter points out that the move creates a contradiction within federal policy: It is logically incongruous to pursue medical cannabis under Schedule III, while a federal ban on intoxicating cannabis-derived products is set to go into effect this November.

While President Trump has urged Congress As for amendments to the upcoming hemp-THC restrictions to protect non-intoxicating, full-spectrum CBD products, while still curbing intoxicating hemp-derived products, they face resistance from a coalition of prohibitionist-minded lawmakers and traditional hemp incumbents who view any carve-outs as a failure to fully close the 2018 Farm Bill loophole that allowed hemp to be classified as a 0.3 Defined as any cannabis plant containing less than 10 percent delta-9 THC.

Because other cannabinoids were not included in this bill, companies found that they could chemically convert legal CBD into intoxicating THC products.

Hunter said, “It is difficult to understand how the government will manage and regulate a third assortment of cannabis-related products, but it appears that state-legal marijuana for adult use is being left out of this important opportunity after spending years establishing clean and safe products, while intoxicating cannabis providers are responsible for the proliferation of untested and unsafe gas station products.”

Meanwhile, Josh Kesselman of High Times warned that a misstep in Washington could favor the handful of companies best positioned to meet new, stricter requirements for compliance and capital access, while marginalizing independent operators and small farmers.

Ultimately, the federal strategy appears to be one of consolidation, clearing the field for a highly regulated, institutional market.

EO is accelerating psychedelic breakthroughs

In parallel with cannabis reform, President Trump has “Expediting medical treatment for serious mental illnessThe EO on April 18 ordered the FDA to prioritize psychedelic drug applications. The order also allocates US$50 million in HHS funding for research.

Then the F.D.A. announced A series of new steps to accelerate access to psychedelics for people with mental health conditions, including prioritizing so-called breakthrough therapy drugs for national priority voucher programs, establishing a “right to try” pathway for eligible patients to access experimental treatments, and partnering with the VA and state governments to expand clinical trial participation and funding for research.

Shea Wihleborg, an analyst at ARK Invest, order is called A “clear signal” that federal agencies are aligned and a catalyst for companies in the sector nearing the commercialization stage. FDA Commissioner Marty Macri also suggested That first approval could come as early as this summer.

In Wihleborg’s view, the successful market adoption of Spratto, which has already reached a run rate of approximately US$2 billion, provides the necessary commercial template for a highly profitable model.

In a recently published newsletter, Wihleborg highlighted Compass Pathways (NASDAQ:CMPS), which get The EO was followed by an FDA rolling review and a National Priority Voucher for its psilocybin treatment, COMP360. According to Wihleborg, COMP360 is “leading the psychedelic pack”, possibly becoming the first classical psychedelic to gain approval.

As part of the directive, Macri announced that three Commissioner’s National Preference Vouchers (CNPVs) will be issued for psychedelic compounds. Although the administration has not officially confirmed the full list of recipients, Transcend Therapeutics has publicly stated It was given priority review.

There is also the USONA Institute, a non-profit medical research organization. received a voucher which ensures a high level of federal priority upon completion of its UASPIRE Phase 3 trial, which evaluates psilocybin as a treatment for major depressive disorder (MDD).

Wihleborg also noted that ATAI Life Sciences (NASDAQ:ATAI:US), which is advancing its 5-MeO-DMT formulation, BPL-003, will significantly benefit from the new accelerated regulatory environment.

bottom line

Both the cannabis rescheduling effort and the psychedelics EO create a federal “mental-health-treatment” frame, where Schedule III cannabis and impending psychedelic approval are treated more like prescription-level therapeutics than recreational drugs.

Ultimately, these developments signal a transition from experimental research to a new, institutionalized phase of the mental health market for these treatments.