Cannabis Rescheduling and Financial Shifts: February 2025 Legislative Updates & Market Trends

Cannabis Rescheduling and Financial Shifts: February 2025 Legislative Updates & Market Trends

The cannabis sector experienced another eventful month in February 2025, as both legislative and financial trends continued to shape the industry's future. The path toward cannabis rescheduling faced several hurdles, while state governments explored new legalization proposals, and major cannabis companies reported financial results.

Cannabis Rescheduling Faces Setbacks

Efforts to reschedule cannabis took a significant hit in February. After concerns were raised regarding potential bias from the Drug Enforcement Administration (DEA), the process hit a roadblock, with discussions becoming increasingly complex. On February 7, DEA administrative law judge John J. Mulrooney granted a withdrawal request from Erin Gorman Kirk, Connecticut's Cannabis Ombudsman, and My Florida Green. The decision was made in light of Connecticut’s ongoing legislative session and the potential for a long, drawn-out rescheduling process that could impact patients' access to medical cannabis.

The issue continued to unravel with multiple legal motions and briefs filed, including one from Doctors for Drug Policy Reform (D4DPR) requesting new witness selection for the rescheduling hearings. Tensions rose further with the confirmation of federal appointees, such as Robert F. Kennedy at the Department of Health and Human Services (HHS), who expressed concerns about high-potency cannabis strains and emphasized the need for more research.

State-Level Legalization and Market Expansion

At the state level, cannabis legalization gained momentum in some areas. On February 5, Pennsylvania Governor Josh Shapiro proposed a recreational cannabis market as part of his state budget. The plan could generate $1.3 billion in tax revenue over five years. However, states like New Hampshire showed mixed support for cannabis reform. The New Hampshire House passed a bill to legalize adult cannabis use, but the lack of provisions for taxation and regulation led market experts to doubt its passage due to Governor Kelly Ayotte’s opposition to reform.

Banking Reform: SAFER Banking Act Under Review

The ongoing challenge of banking access for cannabis businesses was a focal point during a U.S. Senate hearing on February 5. Although much of the conversation revolved around the cryptocurrency industry, Senator Elizabeth Warren highlighted issues faced by legal cannabis companies, citing debanking practices by financial institutions. Experts like Aaron Klein from the Brookings Institution stressed the need for amendments to the SAFER Banking Act to ease costly regulatory requirements, though he cautioned that the bill might not fully address the industry's needs.

Cannabis Company Earnings: Aurora Cannabis & Canopy Growth Reports

Several major cannabis companies reported their financial results for Q3 2025, showcasing both growth and challenges. Aurora Cannabis posted a 37% year-over-year increase in revenue, reaching C$88.2 million for the quarter. The company also saw a net income of C$31.34 million, a sharp improvement from the previous year’s losses.

Meanwhile, Canopy Growth reported a 16% increase in medical cannabis sales revenue and a 14% rise in international sales. Despite a 5% drop in overall revenue, the company made strides by improving its net loss from C$216.8 million to C$121.9 million. However, investors were disappointed by the results, as the stock dropped nearly 5%. To raise capital, Canopy launched an at-the-market program to sell up to US$200 million in shares.

Looking Ahead

February 2025 highlighted both the potential and challenges faced by the cannabis industry. While significant progress was made in some areas, like state-level legalization and financial growth, legal and regulatory setbacks continue to impact the broader sector. As cannabis rescheduling and banking reform efforts evolve, industry leaders must navigate a complicated and shifting landscape.