Little Green Pharma Ltd (ASX: LGP), a leading global medicinal cannabis company with vertically integrated operations across Europe and Australia, has acknowledged the recent Executive Order signed by President Trump, directing the US Attorney General to initiate the process of rescheduling cannabis under the US Controlled Substances Act from Schedule I to Schedule III. The company distributes cannabis-based medicines across Australia and over 12 export markets. Little Green Pharma generates revenue through the sale of medicinal cannabis products and its domestic Health House distribution business.
The Executive Order is considered a significant development in US cannabis policy, potentially marking the most substantial federal reform in over half a century. LGP believes this move aligns with the company’s view that the global cannabis sector is maturing, demonstrated by improved regulatory frameworks, economic conditions, and integration into mainstream healthcare.
According to the announcement, the down-scheduling is anticipated to eliminate the application of Internal Revenue Code Section 280E. This would allow US cannabis operators to deduct standard business expenses, which is expected to improve after-tax cash flows. Furthermore, the company noted that rescheduling could lower regulatory and legal risk costs, potentially leading to reduced capital costs, better access to financing, increased institutional interest, and more M&A opportunities.
LGP views this change as a significant boost to the long-term prospects of the global medicinal cannabis industry. While further legislative and regulatory steps are expected to be required to fully unlock the US market, the company believes this reform represents a very positive shift in direction.
