Mitch Chargo Unpacks How Rescheduling Cannabis to Schedule III Will Benefit Cannabis Businesses

Hinshaw Minneapolis partner Mitch Chargo was featured in several media stories by AZ Big Media and KTTC Rochester discussing the significance of President Donald Trump’s Executive Order that reschedules cannabis from a Schedule I to a Schedule III substance.

Tax Benefits

Although the Executive Order does not legalize cannabis nationwide, Mitch highlights how this change could greatly benefit cannabis businesses in states where the drug is legal, such as Minnesota and Arizona.

One of those benefits can be tax relief and access to federal banking for business owners. “There is a provision known as 280E, which is really a punitive tax statute that negatively impacts cannabis operators, not only in Minnesota, but around the country,” he said.

Additionally, Mitch notes that these tax code changes alone could improve operators’ cash flow, stabilize pricing, and strengthen the long-term viability of the industry.

Ongoing Challenges Following the Reschedule

Mitch also discusses some of the ongoing challenges presented by the Schedule I classification, including the banking hurdles faced by cannabis operators.

“The Schedule I nature of the substance makes it almost impossible for cannabis operators to have access to normal banking, at least federally insured and federally chartered banks,” he said.

Even with rescheduling, Mitch points to unresolved tensions between Food and Drug Administration oversight of Schedule III medical drugs and the realities of adult recreational use products. The persistent gap between federal law and state-regulated markets—such as in Arizona—continues to cause confusion among patients, businesses, and regulators. He emphasizes that while rescheduling is a meaningful step, it does not eliminate the need for clarity between federal and state policy.

Timeline and Outlook

Lastly, Mitch notes that the rescheduling process will likely not be finalized until later in 2026, but it marks a significant step forward for the cannabis market. “We’re not at the finish line, and there are still many steps to go before this becomes official. But this is a pivotal moment. Thoughtful policy changes like this help bring marijuana out of the shadows and into a space where education, research, responsible regulation, and opportunity can continue to grow.”

Media Coverage

• • AZ Big Media: “What does cannabis rescheduling mean for Arizona?” (December 22, 2025)
  • KTTC: “Trump signs executive order to reschedule cannabis from Schedule I to Schedule III” (December 18, 2025)