The Rescheduling of Cannabis in the USA and the Realignment of the Global Market

On December 18, 2025, President Donald Trump signed an executive order transferring cannabis from Schedule I to Schedule III of the United States Controlled Substances Act. For those who have been observing this market for a decade, like me, the first reaction is not euphoria — it is a pragmatic recognition that we are witnessing a structural reconfiguration of the global regulatory landscape.

It is not about celebrating Trump or declaring victory over prohibition. It is about understanding that when the world's largest economy moves cannabis from the same category as heroin and places it alongside codeine, the geopolitical signal transcends borders. The monolithic global prohibition, sustained by the hegemony of US drug policy since 1970, has lost its institutional legitimacy.

What Has Actually Changed

The rescheduling does not legalize cannabis for recreational use at the federal level. States continue to operate their own regulated markets, and the substance remains controlled. But two structural changes permanently alter the game:

First, the end of Section 280E of the Tax Code. Since 1982, companies dealing with Schedule I or II substances have been unable to deduct standard operating expenses, resulting in effective tax rates exceeding 70%. With the migration to Schedule III, operators are taxed like any other corporation — around 21% federally. This is not a tax benefit. It is the basic financial oxygen for any industry aiming to be sustainable.

Released capital means more research, access to credit, stabilization of supply chains, and strategic M&A capability. It benefits well-managed operators of any size, not just large players. It is the financial infrastructure that was missing.

Second, federal recognition of "accepted medical use." This dismantles the legal argument that supported absolute prohibition. When the US Department of Health confirms therapeutic utility and the DEA executes the rescheduling, the narrative of a "drug with no medical value" collapses. And this narrative collapse reverberates globally.

The Domino Effect that Matters for Latin America

Latin America has built its drug policies under the shadow — and often under direct coercion — of the US position. Countries that have tried to liberalize have faced threats of decertification, trade sanctions, and diplomatic pressure. Uruguay challenged this in 2013. Colombia has been trying for years. Mexico faces legislative paralysis in part due to fear of Washington.

Now, this fear has lost practical foundation. If the US admits medical use and facilitates research, how can they justify retaliation against countries doing the same — or going further?

Colombia, Mexico, Uruguay, and other low-cost producers gain political space to expand medical exports without fear of retaliation. Colombian President Gustavo Petro's argument that the US should "legalize to combat trafficking" gains traction when Washington admits that absolute prohibition is not scientifically sustainable.

For Brazil, this validates the regulatory model we are building through Anvisa and MAPA — a medical-first model, with an emphasis on research and quality compliance. We do not need to replicate the regulatory mistakes of the US. We can observe, learn, and build something more coherent.

Lessons from the Collapse of American Hemp

Here comes a critical lesson that I often analyze: arbitrary regulatory distinctions destroy markets.

In 2018, the US created a "hemp" market based on an imaginary line of 0.3% THC via the Farm Bill. The idea was to separate "good" (industrial, non-psychoactive) from "bad" cannabis (recreational, controlled). The result? A market that exploded chaotically, flooded with unregulated products, collapsed prices, bankrupted producers, and generated massive consumer distrust.

This artificial distinction between "hemp" and "cannabis" never made botanical, pharmacological, or commercial sense. It is the same plant. What should matter is the purpose of use and quality standards, not an arbitrary cannabinoid content.

Brazil has the opportunity not to make this mistake. We can regulate cannabis as a single plant, with different regulatory pathways based on application: medical, industrial, potential adult use in the future. Each pathway with its GMP standards, traceability, and control, but without creating parallel markets that cannibalize each other due to regulatory arbitrariness.

The Operational Alert the US Will Face

It is worth noting an operational alert that further strengthens the Brazilian case: the FDA and DEA structure was not designed to absorb cannabis as a plant in its natural state. The FDA traditionally regulates "one molecule, one effect" — cannabis breaks this with dozens of cannabinoids interacting in the entourage effect. This creates a real risk of logistical paralysis: under Schedule III, legal dispensing technically occurs in pharmacies registered with the DEA (CVS, Walgreens), not in current dispensaries operating under state licenses. Products without formal NDA (New Drug Application) approval remain in a legal gray area even after rescheduling.

This operational friction could delay the effective opening of the American market for years, creating a chaotic adjustment period where the law has changed but the compliance infrastructure does not yet exist. For Brazil, this reinforces two structural advantages: we already operate medical distribution via pharmacies (consolidated Anvisa model) and we can design our regulatory categories without forcing the plant into rigid pharmaceutical drawers inherited from 20th-century frameworks.

It is not about copying the US — it is about avoiding the structural mistakes they are about to make while trying to fit a complex botanical reality into regulations designed for isolated synthetic molecules.

Concerns about 'Farmaceuticalization'

There is an apocalyptic narrative circulating: 'Schedule III means Big Pharma will devour the artisanal market.' This view ignores the complexity and history of regulated markets.

Multiple niches can — and will — coexist:

● Pharmaceutical: standardized products, FDA-approved, reimbursable by insurance. For serious conditions, patients needing consistency and coverage.

● Wellness/Nutraceutical: CBD and low THC formulations, regulated as supplements with increasing oversight (the Medicare pilot program for CBD points in this direction).

● State adult use: will continue to exist in the US, but under increasing pressure to adopt pharmaceutical quality standards.

● Agricultural/Industrial: fibers, seeds, biomass — non-psychoactive markets benefiting from destigmatization.

The strategic question is not 'who wins?' but 'how do operators in each niche position themselves to capture value without depending on regulatory arbitrage?'

Quality standards are not enemies of diversity. They eliminate operators who do not prioritize consumer safety — which is necessary for any mature market. Small producers investing in compliance survive. Those relying on regulatory gray areas, do not.

Tension with International Treaties: Risk or Opportunity?

The rescheduling creates technical tension with the 1961 UN Single Convention on Narcotic Drugs, which classifies cannabis in the strictest international Annex I category. The US argues that by maintaining federal controls (prescriptions, DEA registration), they remain technically compliant, even if individual states violate the spirit of the treaty.

This is not hypocrisy. It is pragmatic regulatory diplomacy — the same as Canada and Uruguay did by legalizing while remaining convention signatories. Sovereign countries reinterpret treaties in light of new scientific evidence and public health priorities. This builds long-term legal legitimacy, not erodes it.

For developing countries like Brazil, this approach is a model. We can advance regulations based on science and national interest, respecting international governance without being hostages to frozen interpretations of 1960s treaties.

What Comes Next: 18 Decisive Months

The next 18 months will define who captures value in this new scenario. Some movements are already underway:

● Consolidation of the American market: operators who survived 280E will now have capital for aggressive M&A. Expect a wave of mergers.

● Institutional capital entry: funds that avoided the sector due to compliance will reposition. Not indiscriminately, but for operators with solid governance.

● Regulatory acceleration in Europe and Latam: Germany, Colombia, Mexico will face internal pressure not to lag behind the US in medical innovation and market capture.

● Pressure on global standards: exporters not meeting pharmaceutical GMP will be excluded from premium markets. Competition will not be based on price, but on compliance.

For Brazil, specifically, the strategic window is now. Regulatory decisions in 2026 — especially via MAPA and Anvisa — will determine whether we become competitive world-class producers or low-margin commodity suppliers.

Conclusion: Imperfect Advancements Build Sustainable Markets

I do not need to like Trump to recognize that this administrative act permanently alters the playing field. The monolithic global prohibition has ended. What begins now is an era of fragmented regulation, where the competitive advantage belongs to those who navigate institutional complexity with technical excellence.

This is not a reason for euphoria, but for serious strategic work. Each small regulatory advancement redefines what is possible. Decades of clinical evidence, economic pressure, and political courage from activists and entrepreneurs have made the previous position unsustainable.

What was impossible in 2015 is conventional in 2025. And what we build regulatory-wise in the coming years will determine whether cannabis becomes a sustainable global market or replicates the errors of industries captured by arbitrage and poor governance.

The choice is ours. The time is now.