Rescheduling Stalls Again: Why Cannabis Sellers Shouldn't Wait for 2027

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In July, after the DEA's rescheduling hearing wrapped up, we told CannaMLS readers the practical takeaway was patience. A favorable decision this fall could have lifted adult-use valuations, and there was little reason to rush a sale ahead of it.

That advice no longer holds. The proceeding was frozen for most of October, and even with it set to resume in November, the most credible forecasts put adult-use rescheduling a year or more away. For sellers who have been waiting for a post-rescheduling bump, the cost of waiting just went up, and the bump itself is likely to arrive later, and less automatically, than many expect.

Where Rescheduling Stands

On September 29, the DEA's chief administrative law judge, Derek Julius, stayed the rescheduling proceeding while he considered a motion to add a new Government Accountability Office report on federal drug-scheduling procedures to the record (DEA Docket No. 26-96). The motion came from three parties opposed to rescheduling: the National Drug and Alcohol Screening Association, DUID Victim Voices, and Dr. Kenneth Finn.

The DEA is pushing to keep things moving. In an October 9 response, it argued the GAO report does not justify reopening arguments on the merits. In an October 20 filing, it urged the judge to reject a separate request to reopen the hearing for more discovery and testimony, calling it a "fishing expedition."

On October 22, the judge largely sided with the DEA. He denied the request to reopen the hearing for new testimony and discovery, but admitted the GAO report into the record and allowed optional short briefs on it, due October 29, with replies due November 5. The stay ends automatically when that briefing closes. Then he will issue his recommendation, with no deadline set.

That recommendation is not the finish line. It is nonbinding. The DEA Administrator still has to make a final decision, a final rule has to be published, and opponents can challenge the outcome in court.

Forecasts reflect that longer runway. Zuanic & Associates expects adult-use rescheduling in Q3 2027, with Q1 2027 as the best case. ATB Cormark, surveyed in late September, puts its base case at Q1 2027. Either way, it is not happening this year.

Medical cannabis is unaffected. State-licensed medical operations have been in Schedule III since April and are no longer subject to Section 280E. Adult-use operations remain in Schedule I, and 280E still applies to them in full.

What Rescheduling Will and Won't Do for Your Valuation

Before deciding to wait, it is worth being clear about what adult-use rescheduling actually changes. It is not federal legalization. It does not open interstate commerce, change state licensing, or alter how cannabis is grown, sold, or regulated by the states. Commercially, the day after rescheduling looks a lot like the day before.

It does two things. First, it removes Section 280E for adult-use operators, which raises after-tax cash flow for businesses that are already profitable. Second, and more important for valuations, it signals federal acceptance. That signal is what institutional investors have been waiting for.

We expect the real valuation impact to come from capital, not from the rule itself. Equity investors who have stayed on the sidelines while cannabis sat in Schedule I should start returning, bringing fresh equity to strong operators for the first time in years. Rescheduling also clears the way for adult-use operators to list on major U.S. exchanges, as Trulieve and Glass House did with their medical businesses this year. NewLake Capital Partners' CEO said on October 21 that he expects the rest of the industry to follow once rescheduling concludes.

That capital will start at the top, with public and private operators that have institutional scale and institutional-quality financials. Their most likely use of it is consolidation. In other words, it is competitive tension among well-capitalized buyers that will push prices up, not rescheduling itself. And the capital moves down the market in stages. Even if rescheduling takes effect in 2027, smaller operators may not see that equity turn into offers for their businesses until 2028.

That changes the question every seller should be asking. It is not "will rescheduling help?" but "will my business be materially stronger in 2028 than it is today?" Only owners who can honestly answer yes should consider waiting. Everyone else should start preparing marketing materials now.

The Math of Waiting

Even if you assume rescheduling does lift multiples for a business like yours, waiting rarely pays. Here is a simple illustration using round, hypothetical numbers.

Hypothetical adult-use dispensary Sell today Wait 12 months
Annual revenue $5.00M $4.75M (prices down 5%)
EBITDA $1.00M $0.75M
Valuation multiple 4.0x 4.6x (up 15%)
Implied value $4.00M $3.45M

Illustrative only. Assumes constant volume and operating costs.

Even with a 15% higher multiple, the seller who waits ends up with a lower valuation. Holding volume and costs steady, a price decline of less than 3% is enough to erase the entire gain from the higher multiple. That is a modest decline by recent standards: in Massachusetts, retail flower prices fell 8% year over year through August. And for many smaller operators, that higher multiple may not show up until 2028, which only widens the gap.

Valuation is only part of it. While waiting, adult-use sellers also carry:

  • 280E tax drag. Another year of federal income tax on gross profit, with no deduction for rent, payroll, or other operating expenses.
  • Debt service. Even the industry's strongest borrowers pay real rates: Vireo refinanced its New York facility at 8.5% this month, and Verano's March term loan carries 9.5%. Smaller operators typically pay 13% to 15% or more.
  • Property and operating costs. Rent or property taxes, cannabis-specific insurance, security, and utilities continue whether or not the business is growing.

Not Every Market Is the Same

Urgency depends on where you operate and what you hold.

  • Compressing markets: sell sooner. Massachusetts flower averages $3.80 per gram, the lowest in the East, and Illinois flower prices are down 36% since Q3 2024. In these markets, every quarter of waiting likely means lower EBITDA, leading to a lower exit value.
  • Strong markets: you have leverage, so use it. Ohio sales grew 31% year over year in Q3 with flower prices rising, and Maryland stores average roughly $9.9 million in annualized revenue. Sellers here are negotiating from strength today, and there is no guarantee those conditions last into 2027.
  • Medical licenses: the premium is already here. Medical operations are already 280E-free. Trulieve and Glass House both listed on the New York Stock Exchange this year by separating their medical businesses. If you hold a medical license, you do not need to wait for rescheduling to capture its value.

Who's Buying, and How

While M&A activity has slowed significantly in recent years, not all buyers have left the market. Vireo Growth is assembling a pro forma 108-store footprint in Florida, second only to Trulieve, through its Green Dragon, Fluent, and Planet 13 acquisitions (Green Dragon has closed; the other two are expected to close in 2027). TerrAscend acquired Aunt Mary's in New Jersey, a single store generating more than $10 million in annualized revenue. In Delaware, Cannabist's three stores were bought by entities associated with Millstreet Capital Management. And Massachusetts recently doubled its ownership cap from three stores to six, opening the door to more consolidation. But buyers are selective, and they are paying with structure. As we noted in August, traditional senior debt is harder to secure than it has been in years, and more deals are closing with seller notes, earnouts, and sale-leasebacks. Zuanic & Associates also expects many acquirers to pay in stock. Sellers who expect all cash at closing should be prepared to adjust.

Six Steps to Take Now

  1. Start your marketing materials. A confidential teaser, clean financials, and an organized data room take weeks to assemble. Having them ready lets you act on today's buyers, or move quickly when new capital reaches your segment of the market.
  2. Price on today's cash flow. Buyers underwrite current EBITDA and asset quality, not post-280E projections. Pricing to a 2027 scenario will stall your deal.
  3. Abstract your lease. Above-market rent is the most common reason deals die after the LOI. Prepare a clean lease summary and address problem terms before you go to market.
  4. Document your medical and adult-use split. If you have medical sales, show how revenue and expenses are allocated. It directly affects a buyer's tax picture.
  5. Confirm transfer timelines with your regulator. License transfers and change-of-ownership approvals can take months. Know the process before a buyer asks.
  6. Decide which deal structures you'll accept. Know in advance where you stand on seller financing, earnouts, stock consideration, and sale-leasebacks of owned real estate.

Ready to Explore Your Exit?

Whether you're selling an operating dispensary, a cultivation facility, a license, or cannabis-zoned real estate, CannaMLS connects sellers with buyers, brokers, and investors nationwide.

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