A new MJBizDaily guest column from Anthony Coniglio, the president and CEO of NewLake Capital Partners who spent 14 years at JPMorgan, makes the case that rescheduling is really about one thing: institutional capital finally being able to touch cannabis. He is right, and the industry should be thinking about it exactly that way.
Would rescheduling actually legalize anything?
No, and this is the part people keep getting wrong. Moving marijuana to Schedule 3 would not make state licensed businesses federally legal. The DEA has been explicit that cannabis stays under the Controlled Substances Act. What rescheduling would do is fundamentally improve the industry’s financial position and narrow the gap between cannabis and conventional sectors.
That distinction matters because the hype cycle keeps selling rescheduling as the end of the story. It is the beginning of one. Institutional capital does not move on a single announcement. It moves when risks become measurable, familiar and manageable. Rescheduling gets the industry closer to that standard without arriving at it. Operators who are planning for a post rescheduling victory lap are planning for the wrong event.
What are institutional investors actually watching?
The boring plumbing, which is exactly what you would expect from people who spent careers at banks. Coniglio’s watch list: how federal registration gets applied, how banks interpret the new framework, custody rules, and how exchanges treat cannabis companies.
Each of those is a gate. Banks need a compliance framework they can defend to regulators. Custodians need rules that let them hold the assets. Exchanges need listing standards that do not get them in trouble. Until those gates open, the money stays on the sidelines no matter what the DEA’s scheduling decision says on paper. This is the same slow machinery I have been tracking in the cannabis business collection, where the gap between policy announcements and operational reality keeps deciding who survives.
So what should operators do while they wait?
Get underwritable. That is the whole thesis, and it is the right one. The interesting story is not whether institutions enter, it is which companies are prepared when they do. Coniglio’s advice: use the waiting period to strengthen balance sheets, rationalize footprints and improve governance.
The scale of the prize explains the urgency. Whitney Economics forecasts about $30.5B in 2026 US legal sales after a 2025 dip under $30B. States collected over $4.57B in adult use tax revenue in 2025, $28.4B in total cannabis taxes since adult use began. New York did $1.7B in 2025. Virginia recreational retail is expected this summer with about $1B in estimated annual sales. That is a real market that institutional money wants into, and the companies with clean books and disciplined operations will be first in line. The MSO game I wrote about in why cannabis MSOs are backing an anti cannabis Senate candidate is the same game at a higher stakes table: positioning for the capital that is coming.
Frequently Asked Questions
- Would Schedule 3 rescheduling make cannabis federally legal? No. State licensed businesses would remain federally illegal, and the DEA has been explicit that marijuana stays under the Controlled Substances Act. Rescheduling improves the industry’s financial position without ending prohibition.
- Why does institutional capital matter so much? Because it brings lower cost capital, deeper liquidity and mainstream credibility. It moves when risks become measurable, familiar and manageable, not on announcements.
- What is blocking institutional money right now? The operational gates: how federal registration is applied, how banks interpret the framework, custody rules and how exchanges treat cannabis companies.
- How big is the US legal market? Whitney Economics forecasts about $30.5B in 2026 legal sales. States collected over $4.57B in adult use tax revenue in 2025 and $28.4B total since adult use began.
- What should operators do in the meantime? Strengthen balance sheets, rationalize footprints and improve governance. The companies that look underwritable when the gates open get the money first.
Source: MJBizDaily guest column by Anthony Coniglio of NewLake Capital Partners