Cannabis Real Estate Eyes More Opportunity As Trump Moves To Loosen Restrictions

Ever since medical marijuana use was first legalized by a handful of states in the late 1990s, the cannabis industry has grappled with how to do business without the federal government’s blessing.

But when the Trump administration last week announced it was changing how strictly it regulates cannabis, it opened the door for growers and retailers to access tax deductions that have long been available to other retailers and manufacturers and to access new lines of credit. 

"We're very excited about the announcements that were made last week," said Anthony Coniglio, CEO of NewLake Capital Partners, a REIT that specializes in cannabis real estate. "Yes, there's a lot more that needs to be fleshed out in terms of details, but as with any reform, it takes time."

Specifically, the Trump administration announced it is shifting medical marijuana from a Schedule I to a Schedule III drug. In doing so, the agency lowered its warning of abuse risk and recognized its medical uses, moving it out of the same class of drugs as heroin and into the same class of drugs as Ambien. 

The Department of Treasury and the Internal Revenue Service plan to issue guidance to address section 280E of the IRS tax code, which denies deductions and credits for businesses that trade or transport Schedule I and Schedule II drugs. But the administration already said in a press release that rescheduling removes 280E as a bar to claiming deductions and credits.

Getting out from under the 280E rule would help retailers, many of whom are already subject to high state taxes, industry advocates said. 

"The potential tax relief associated with rescheduling—particularly relief from the burdens of Section 280E—is critical for state-licensed cannabis businesses," Colorado Leads CEO Chuck Smith said in a statement. "Ensuring that this benefit is implemented in a workable and equitable way will be essential to the success of this policy change."

The reclassification may also bring needed capital to the industry, advocates say. For decades, retailers and growers have suffered from a lack of reliable financing options because traditional banks have been loath to lend to businesses taking part in a federally prohibited industry. 

Less than 10% of U.S. banking institutions do business with the industry, according to the National Organization for the Reform of Marijuana Laws, an advocacy organization. NORML extrapolated this stat from annual Treasury filings.

The lack of traditional capital has forced industry players to get creative. Large-scale operators like Trulieve, with 240 dispensaries across eight states, have  relied heavily on sale-leaseback deals as a way to shore up capital while also locking down real estate for their businesses. 

Past legislative efforts to address this, such as the Secure and Fair Enforcement Regulation Banking Act of 2023, have failed to pass Congress. Some cannabis industry insiders hope the Trump administration’s move will thaw credit to businesses. 

“While the executive order does not itself change banking law—comprehensive reform would require passage of the long-stalled SAFER Banking Act—it materially reduces perceived risks for financial institutions,” said Scott “Smoke” Wallin, a cannabis industry investor, in a LinkedIn post. 

Advocates caution, however, that this change doesn't cover recreational use of the drug, which represents some two-thirds of all sales annually, according to industry estimates. In total, there was roughly $31.5B in legal cannabis sales in 2025, according to BDSA, a cannabis industry researcher.  

The Trump administration has said it plans to hold a June 29 hearing to consider broader rescheduling of marijuana as a whole.

Short-term uncertainty about the recreational cannabis industry may hold back industry growth overall and make landlords cautious to open up additional space, Coniglio said. Retailers and growers already have few spaces to choose from because of restrictive state and local zoning regulations for cannabis businesses. 

"The fact that medical has been, quote, unquote, fixed as long as the operators can maintain their license [is] a big question mark that some landlords will have," he said. "I think we're going to see the availability of real estate open up a little bit, but not dramatically."

Terry Mendez, CEO of Safe Harbor Financial, a fintech company that offers financial services to cannabis and hemp businesses, said the partial rescheduling could complicate things for operators who touch both medical and recreational businesses.

"You're going to see a push, in my opinion, to dispensaries asking people, 'Hey, do you have a med card?'" Mendez said. "They'd rather the sale go under the med side than the recreational side."

And like with any large federal regulatory shift, the tax reforms technically will still need to go through iterations of review before the final rule is published. Until then, experts are still operating under the old rules, said Green Life Business Group Chief Operating Officer Gordon Sattro.

"280E, as of right now, until we get that removal, which requires guidance from the IRS, we assume it's still there," he said.

Likewise, the banking sector may need additional regulatory certainty before it will lend to the industry more freely. That’s why the DEA announcement should be viewed as an early part of a long process, Sattro said.  

"There are so many steps that need to occur between now and 280E being off the table," he said.