2025 has been marked by both exciting new progress and persistent challenges. From the anticipated but delayed federal rescheduling efforts in the US to sweeping regulatory updates in Canada, major changes are underway all across North America.
To help you navigate these dynamic shifts, we’ve compiled a summary of the most impactful milestones and regulation changes that have shaped the cannabis industry across the United States and Canada so far this year.
Cannabis Rescheduling Hits A Hurdle
The effort to reschedule cannabis has essentially hit a wall in 2025, after being continuously delayed amid legal appeals and procedural challenges last year. In January 2025, the DEA administrative hearing, which was originally scheduled for late 2024, was indefinitely postponed.
Adding to the uncertainty, Terrance Cole, who was sworn in as the new DEA Administrator in July 2025, has notably omitted cannabis rescheduling from his recently announced "strategic priorities". This omission is particularly concerning since he stated that reviewing the marijuana rescheduling proposal would be "one of my first priorities" during his confirmation hearing.
President Trump has recently shown interest in cannabis policy after meetings with major industry player Trulieve and lobbyist Brian Ballard, whose network and PACs have poured millions into pro-rescheduling efforts—including $1M to Trump’s PAC. Trulieve itself made significant donations after a failed Florida legalization push Trump publicly backed last year. While personally opposed to marijuana use, Trump has previously signaled openness to reducing cannabis’s criminal classification. The industry’s high-dollar lobbying suggests cannabis reform could become a Trump campaign talking point
With the final rule on rescheduling now optimistically expected in late 2025, the industry is left in a holding pattern, anxiously awaiting a clear signal on the future of federal cannabis policy. If it comes to pass, the rescheduling would fundamentally reshape tax, finance, and research opportunities for cannabis businesses, primarily by alleviating the burden of IRS Section 280E.
New Cannabis Regulations in Canada
Health Canada enacted a comprehensive set of amendments in 2025, targeting industry pain points. These amendments included expanded micro licensing, administrative relief, and updates aimed at promoting innovation and reducing operational bottlenecks, all while preserving public health and safety priorities.
In addition to these broad industry updates, a significant portion of the new regulations directly impact retailers and dispensaries. Key updates include:
Updates to Packaging and Labelling Requirements
Packaging and labelling requirements for cannabis products have been updated to offer greater flexibility:
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Packaging Materials: The use of transparent packaging and cut-out windows is now permitted for dried cannabis, fresh cannabis, and seed products.
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Brand Elements: Producers may now include a single, additional barcode, such as a QR code, on product labels. Containers can also feature caps and bodies of different colours.
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Informational Inserts: The inclusion of informational inserts or leaflets within the outer packaging of any cannabis product is now allowed.
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Potency Display: Labelling requirements for potency have been simplified to mandate only the display of "total THC" and "total CBD."
- Required Statements: A cannabis equivalency statement and a note stating that "no expiry date has been determined" are no longer needed on the labels.
Updates on the Product Types & Classes
The amendments authorize new product formats and remove previous restrictions on certain product classes:
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Pre-Rolled Cannabis: The previous 1 g maximum weight limit for dried cannabis in a single pre-roll has been eliminated.
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Co-Packed Products: The co-packing of multiple cannabis products within a single container is now permitted. The total quantity within a co-pack must not exceed the public possession limit, which is equivalent to 30 g of dried cannabis.
New Products Process Streamlined
Several requirements were adjusted to reduce administrative burden and accelerate market entry for certain products.
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Notice of New Product: Licensed producers are no longer required to provide Health Canada with a 60-day advance Notice of New Cannabis Products for new dried and fresh cannabis products.
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Consumer Information Document: The requirement for licensed processors to provide a paper copy of the Consumer Information Document to retailers has been discontinued.
Stabilized Payments Landscape for Cannabis
While the long-anticipated SAFER Banking Act joined the list of other cannabis reforms that stalled in Congress, major progress has still been made in cannabis banking access this year. Crucially, with the US payments landscape becoming more stabilized, reliability for cannabis payments solutions has improved significantly, though federal blockages remain.
Cashless solutions are now more widely available, allowing dispensaries and CBD businesses to accept debit and even credit card payments. Retailers now benefit from fewer payment shutdowns, smoother & faster checkout, and more flexible options with systems purpose-built for the cannabis space.
Also Read: Cannabis Payments Guide for Dispensaries 2025
Despite the setbacks at the federal level in 2025, the stability that comes with industry-specialized payment providers is a sign of good things, particularly for retailers that have been caught up in payment systems crackdowns in recent years.
Attempted Crackdown on CBD & Farm Bill Across US States
The 2018 Farm Bill federally legalized hemp (with limits) and created a burgeoning market for hemp-derived cannabinoids, including various forms of THC (like Delta-8 and Delta-10), that are not explicitly scheduled under federal controlled substance laws. This created what some refer to as a "loophole."
Recently, there has been a major push to redefine "hemp" and impose stricter restrictions on intoxicating THC derivatives. Federal and state lawmakers have aggressively advanced new proposals to close loopholes created by the 2018 and 2020 Farm Bills. Several states, especially in the South, have implemented new enforcement on hemp-derived edibles and beverages.
A prime example of this ongoing struggle played out recently in Texas. The state's legislature passed Senate Bill 3 (SB 3), which aimed to outlaw most consumable hemp-derived THC products, essentially targeting the thriving $5.5 billion hemp-derived THC industry. This bill would have severely restricted the types of cannabinoids allowed, effectively criminalizing products that are federally legal under the 2018 Farm Bill's 0.3% Delta-9 THC limit.
However, in a crucial, 11th-hour move, Texas Governor Greg Abbott vetoed SB 3 on June 22, 2025. This decision has saved the industry for the time being. Governor Abbott cited concerns about the bill's constitutionality and the likelihood of it being tied up in lengthy legal battles. He emphasized that the state "can do better" by seeking a regulated market rather than outright prohibition.
The Biggest Cannabis Changes and Milestones in the US and Canada
There has been a lot happening this year, and you may have missed some of the major cannabis changes and milestones across the United States and Canada. To get you up to speed, here is a quick summary of some of the cannabis highlights of 2025, so far.
Minnesota
On 22nd July 2025, Minnesota held its second lottery for cannabis retail licenses, selecting 75 retailers. The OCM had already held the first lottery last month, which exclusively served social equity applicants, rounding out the state's initial total of 150 cannabis retailers.
Also in 2025, Minnesota lawmakers introduced two bills, one to regulate psilocybin therapy and another to legalize cannabis home cultivation for adults.
Unfortunately, not all changes were equally welcome. Retailers and businesses expressed concern over the new state budget, which increased the gross receipts tax on cannabis products from 10% to 15%.
New York
New York remains one of the fastest growing cannabis markets with a remarkable year-over-year sales growth of 93.1% in 2025. The growth can be attributed partly to the increasing number of dispensaries that have grown to over 300 as of mid-2025.
However, the New York Office of Cannabis Management (OCM) recently announced a significant error: a proximity correction impacting 105 licensed dispensaries and 47 pending applicants. The OCM staff incorrectly approved 152 locations, including 60 already open dispensaries, due to a misinterpretation of school proximity rules.
While the 47 pending applicants will likely need to find new locations, the OCM is pursuing a legislative fix to allow existing licensed dispensaries to remain at their current sites. Additionally, the OCM is working on establishing a $15 million relief fund, offering applicants up to $250,000 to help cover relocation costs.
New York made it mandatory for all licensees to use a compliant electronic inventory tracking system that can integrate with BioTrack, and set a deadline of October 2025 for retailers to integrate with the track and trace system – but that deadline was abruptly paused in August. State officials also announced a potential partnership between BioTrack and Metrc.
At the moment, it’s unclear what this “partnership” would mean for cannabis retailers or which system will be adopted, though some believe Metrc could entirely replace BioTrack. For now, the October deadline is almost certainly meaningless.
Illinois
On February 4, 2025, Illinois announced that it will be replacing BioTrack with Metrc as the state’s sole system of record. Four months later, on July 1, 2025, Illinois completed its transition from BioTrack to Metrc as the state’s official seed-to-sale system.
Also Read: Metrc Illinois: A Retailer’s Guide to Transitioning from BioTrack
Illinois also saw several other positive regulatory developments, including a temporary pause on new retail licenses (effective July 1, 2025) to help social equity applicants secure capital and expand. The state also launched a $12 million forgivable loan program for social equity dispensaries, offering up to $240,000 per business.
Like Minnesota, Illinois also introduced a bill to legalize supervised psilocybin therapy, as well as removing licensing fees for existing cannabis transporters until 2027 and freezing transporter licenses to benefit smaller, independent operators.
Ontario
Effective May 23, 2025, Ontario's cannabis stores no longer need to cover windows, allowing products to be visible from the exterior. This move by the AGCO aims to create a more welcoming retail environment, though stores must still ensure promotions aren't visible to comply with youth exposure laws.
The Best Time to Start a Cannabis Business
Despite some regulatory hurdles and setbacks, the cannabis industry is continuing its march toward mainstream acceptance and stability in 2025. From evolving payment solutions to significant state-specific developments and expansions, the industry is demonstrating remarkable resilience and adaptability.
Just as the industry is maturing, so are the technological solutions available to support its growth. If you're looking to start or scale your cannabis business, choosing a robust and compliant point-of-sale system (and the ecosystem that comes with it) is imperative.
Cova POS systems have consistently supported cannabis retailers across North America for years, providing secure, efficient, and compliant operations.
To learn how Cova can help your business thrive amidst these changes, schedule your Cova Software Dispensary POS Demo today. Our team of experts is ready to demonstrate how our award-winning system can meet your unique needs and help you confidently navigate the evolving cannabis landscape.