The Green Rush: What’s Next for the Future of Cannabis?

The cannabis industry is characterized by significant variation across states, with distinct regulations, market dynamics, and consumer preferences.

More Legalization

The movement for cannabis legalization has been led by the state since California created a medical program in 1996. Although this trend slowed in 2024 — no new states added recreational cannabis programs for the first time since 2017 — it certainly has not stopped.

Nebraska voters came out en masse in support of their new medical program, with the initiative passing with 71% of the vote. The future of the program currently hangs in the balance of the state court system, but public opinion is clear: people want greater access to cannabis across the country. 2025 offers new opportunities for states to create or expand cannabis legalization programs.

Maturing Markets

The oldest cannabis markets in the country have surpassed a decade in operation — no small feat for a plant that was once relegated to the fringes of society. Mature cannabis markets face different problems than nascent ones, like oversupply, price compression, and increasing competition. To help these markets continue, we’re likely to see some changes in regulations, licensing framework, and increased consumer protections.

Tax Revenue & Economic Growth

One of the biggest benefits of recreational cannabis is the tax revenue it brings to the state and its communities — hundreds of thousands, if not millions of dollars pouring back in. Many states reinvest this money back into the communities, for education, rehabilitation, community restoration, education, and other public services.

States with existing programs will continue to benefit from this revenue and its reinvestment, while this money is also likely to be used as a benefit to creating new recreational programs.

Currently, cannabis is still federally illegal. But any changes to this at the federal level will have a massive ripple effect throughout the cannabis market. The following are a few things to keep an eye on this year.

Rescheduling

The Biden administration took the first steps to reschedule cannabis from a Schedule I substance to a Schedule III substance. While this process has been slow — painfully slow for many cannabis companies watching with bated breath — we expect to see this push continue in the new administration.

Reclassifying cannabis as a Schedule III substance would significantly reduce challenges faced by cannabis companies and pave the way for further cannabis research at a federal level.

SAFE Banking

For several years now, cannabis companies have crossed their fingers in hopes that the SAFE Banking Act would pass — and we continue to do so. While rescheduling cannabis would have a similar effect, the SAFA Act would allow large banks to work with cannabis companies without fear of penalties, providing much-needed financial support to the industry.

Federal Legalization

This is perhaps the least likely outcome for cannabis in the new administration, but the people have made their voices clear: there is support for federal cannabis legalization. This is a long shot, as there would be large barriers of resistance to overcome — but you never know!

Banking Restrictions

Even if the SAFE Act passes, if cannabis is still a Schedule III substance, many banks will remain hesitant to work with cannabis businesses. This is nothing new for cannabis businesses, who have dealt with uncertain financial futures for years, but it continues to pose a problem. However, there are workarounds here, and financial institutions that are welcoming to cannabis businesses.

Interstate Commerce

Since cannabis is still federally illegal, so is interstate commerce. The ability to move cannabis products across state lines legally would be a game-changer for plant-touching companies, especially small businesses. Until that day, the industry faces growth limitations.

International Trade

The continued federal prohibition of the cannabis plant makes international trade agreements and treaties complicated at best, and nearly impossible at worst. The ability to export and import cannabis and cannabis-derived products would open up a new world for manufacturers, processors, brands, and consumers alike.

Working in the cannabis industry is never smooth sailing — which is why it tends to attract resilient and forward-thinking entrepreneurs. While we don’t expect to see a federal cannabis revolution in 2025, the year will still bring new changes and growth to this industry that is only getting started. Smart operators think forward, protecting their businesses against possible restrictions and taking advantage of opportunities wherever they present.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by email [email protected] or calling 646-854-1093 for a customized letter or learning more about your cannabis insurance options.