• Former Justice Department employees have an alumni network to turn to for help with looking for work. An employee organization called Justice Connection said it recently expanded its DOJ alumni network, aiming to help employees navigate transitions out of the agency. The organization is offering to connect current and recent DOJ employees with more than 100 agency alumni. They’ll be able to get informational interviews, advice and insights for how to continue on a specific career path, including attorneys, legal support staff and many others.
  (Expanding network to help DOJ employees find work - Justice Connection)
• The House on Thursday passed the final group of spending bills needed before the Jan. 30 funding deadline. In a vote of 341 to 88, lawmakers approved fiscal 2026 funding for the departments of Defense, Labor, Education, Transportation and Health and Human Services. But due to Democratic opposition over ICE funding, the spending bill for the Department of Homeland Security passed with a much narrower margin, in a party line vote of 220 to 207. The appropriations package now heads to the Senate for consideration.
  (House passes final bills to complete fiscal 2026 appropriations - House Appropriations Committee)
• The Postal Service is now accepting bids from shippers for use of its nationwide last-mile delivery network. USPS already has agreements with shipping giants like Amazon and UPS to get packages to their final destination. But it’s looking to give other delivery companies an opportunity to strike similar deals. Last-mile delivery is the most expensive leg of deliveries, and USPS goes to more addresses than its private-sector competitors. USPS said winning bidders will be notified during the second quarter of this calendar year.
  (U.S. Postal Service opens bid solicitation platform for entry to last-mile delivery network - U.S. Postal Service)
• The Department of Veterans Affairs has officially lifted its hiring freeze, but staffing caps are still in place for a smaller workforce. The VA saw its first-ever workforce net decrease last year and is unlikely to hire its way to a higher headcount than what it currently has. VA’s Under Secretary for Health said the hiring freeze is over, but VA facilities generally can’t exceed staffing caps set for their regions. A report from Senate VA Committee Democrats said the VA lost more than 40,000 employees last year. About 10,000 of those employees worked in frontline positions that the department has struggled to fill.
  (VA officially lifts hiring freeze, but staffing caps still in place for shrinking workforce - Federal News Network)
• Value-added resellers finally get a chance to weigh in on the concerns about their business model and the changes the General Services Administration has been considering. GSA issued a request for information yesterday seeking feedback from VARs and others to gain a clearer understanding of the value added by resellers, and the resulting impact of these services on pricing and the ability to meet the government’s requirements. The initial focus of the feedback is for companies in a specific special item number for IT hardware, 33411. Responses to the RFI are due by Feb. 9.
  (GSA seeks feedback from VARs - General Services Administration)
• The Small Business Administration suspended nearly a quarter of all participants in the 8(a) program. The SBA has suspended more than 1,000 companies in the program. SBA made the decision after it deemed those small businesses non-compliant with its financial data request from December. An SBA spokesperson said these suspended firms have 45 days to file an appeal. At the same time, SBA issued new guidance yesterday clarifying how it will run the small business development program going forward. Among the changes is that SBA will administer the 8(a) program based on race-neutral requirements. It also will no longer approve the use of “socially disadvantage narratives” as a way to get into the program.
  (SBA ends use of ‘socially disadvantage narratives’ for 8(a) program - Federal News Network)
• The Marine Corps has tapped GenAI.mil as its official enterprise generative artificial intelligence platform that will consolidate all duplicative, general-purpose GenAI usage into one system. Marines, civilians and contractors can start using GenAI.mil immediately. The platform is approved only for processing Controlled Unclassified Information, but the service plans to expand GenAI.mil to higher classification networks. The service also plans to integrate Marine Corps data sources and agentic AI development solutions in the future.
  (Marine Corps designates GenAI.mil its enterprise AI platform - MARADMIN)
• Congress wants the Space Force to organize its programs and people by mission area. One of the root causes of the Defense Department's failed acquisition system is the military rotation system, which often replaces program managers every two to three years. That turnover, lawmakers argue, prevents personnel from staying in place long enough to develop the technical expertise needed to manage increasingly complex systems. Now, Congress is directing the Pentagon to propose a Space Force pilot program that would keep personnel assigned to specific mission areas for substantially longer tours. The pilot program should also examine eliminating traditional occupational specialty categories, such as acquisition or operations, in favor of mission-focused specializations, such as missile warning or satellite communications.
  (Congress wants Space Force to organize programs and people by mission area - House.gov)

The post Former Justice Dept employees form alumni network to help with job searches first appeared on Federal News Network.

© Federal News Network

• The Justice Department recovered more money through the False Claims Act in fiscal 2025 than ever before. New data shows DoJ won $6.8 billion in settlements for healthcare, procurement and tariff fraud. A significant amount of those cases were driven by whistleblowers. DoJ said there were 1,297 qui tam lawsuits filed last year, the highest number in a single year, and the government opened 401 investigations. Of the $6.8 billion in False Claims Act recoveries last year, $5.7 billion related to matters that involved the health care industry.
  (DoJ recovers more money than ever before under the False Claims Act - Justice Department)
• The audit of the 8(a) program is expanding to the largest user of the small business contracting program. The Defense Department is joining the Treasury Department and Small Business Administration in reviewing all sole source contracts under the 8(a) program. Secretary Pete Hegseth said the Pentagon spends $100 million a year on 8(a) sole source contracts and he's worried about fraud. "I'm ordering a line-by-line review of every small business sole source 8(a) contract that is over $20 million. We will look at everything smaller than that too," Hegseth said in a video on X. Hegseth said it will be a two-stage review. If the contract doesn't help the DoD mission, they will cancel it. The other stage is to make sure the small business is the one doing the work and not acting as a pass through.
  (DoD to audit 8(a) sole source contracts - Social media platform X)
• New legislation in the House would put new restraints around the Department of Homeland Security’s use of facial recognition and related technologies. The Realigning Mobile Phone Biometrics for American Privacy Protection Act would establish stronger standards around DHS’s use of mobile biometric identification tools. House Democrats sponsoring the bill say Immigration and Customs Enforcement has been using an unproven biometric identification tool on American citizens in recent months. ICE has been using the tool called Mobile Fortify to help determine a person’s legal status.
  (Thompson introduces legislation to curb unchecked DHS mobile biometric surveillance and protect privacy of American citizens - House Homeland Security Committee Democrats )
• One agency is easing up on in-office work requirements, while another is ordered to consider more exceptions. The Office of Workers' Compensation Programs is offering remote work to some of its employees because of limited office space. An agency memo states that while most of its employees benefit from in-person collaboration, employees in roles eligible for remote work are less collaborative and require distraction-free focus. Meanwhile, a third-party arbitrator is directing the Centers for Medicare and Medicaid Services to meet with one its unions to discuss exemptions to its return to office mandate.
  (One agency eases in-office work requirements, while another is ordered to consider exceptions - Federal News Network)
• The Department of Veterans Affairs is looking for a permanent leader to oversee its benefits division. VA’s deputy secretary is heading up the search for an under secretary for benefits. Once a candidate is selected, they will need to be confirmed by the Senate before starting the job. Under the Trump administration, the Veterans Benefits Administration has reduced its backlog of benefits claims by 60%.
  (VA starts search for permanent Veterans Benefits Administration leader - Department of Veterans Affairs)
• Transportation Security Administration employees will continue to have a union after a new court ruling. A federal judge ruled that TSA and the Department of Homeland Security violated a court order when it made a second attempt to eliminate TSA collective bargaining rights late last year. Judge Jamal Whitehead’s ruling last week blocked a September DHS directive that would have dissolved TSA’s collective bargaining agreement. Whitehead found DHS and TSA’s action would violate a preliminary injunction issued last June that stopped the department’s first attempt to eliminate the agreement. The fight over TSA union rights is scheduled to go to trial this September.
  (Judge finds TSA violated court order in new attempt to dissolve union - Federal News Network)
• The Defense Logistics Agency is turning to artificial intelligence to improve its demand planning. The agency has begun ingesting maintenance, consumption and supply data into its models, starting with the Army and expanding next to the Navy and Air Force, with additional work underway for the Marine Corps. The goal is to more accurately forecast demand, improve inventory health and ensure the right items are on the shelf. DLA is currently about 60% accurate when it comes to demand planning. The agency is also using AI to get after our administrative and production lead times.
  (DLA to use AI to improve demand planning - AFCEA Army IT Day)
• A bipartisan group of lawmakers is pushing to hold military family housing contractors financially accountable for remediation, relocation and property loss. For decades, service members and their families have been exposed to hazardous conditions in privatized military housing; military families are dealing with black mold, contaminated water and asbestos, among other issues. A new bill introduced by Sen. Richard Blumenthal (D-Conn.) would establish Defense Department–wide standards for acceptable humidity levels, create a 24/7 hotline and website for reporting hazards, require third-party oversight and impose penalties for noncompliance, including withholding fees and allowing tenants to retain their rent. “Now it's time for legislation to protect our military families, 700,000. That's right, 700,000 service members and their families presently face hazardous conditions that may cause respiratory illness, developmental delays, other kinds of severe diseases and effects, rashes, neurological symptoms, vision loss, seizures and chronic conditions.”
  (Lawmakers want to hold military housing contractors financially accountable - Sen. Richard Blumenthal (D-Conn.))

The post Justice Dept recovers more money than ever in 2025 for False Claims Act violations first appeared on Federal News Network.

© AP Photo/Andrew Harnik

Congressional appropriators are rejecting some of the most severe agency budget cuts proposed by the Trump administration, and are looking to put additional guardrails on unilateral agency reorganizations that could further shrink the federal workforce.

A “minibus” of three spending bills for fiscal 2026, released by the House and Senate appropriations committees on Monday, prohibits covered agencies from using congressional funds to carry out most agency reorganization activities until they provide advanced notice to appropriators. Those activities include unilaterally reprogramming funds to create or eliminate programs, projects or activities, relocate any office or employees, or cut more than 5% of the employees or funding that support a program, project or activity.

It also prohibits agencies from carrying out these reorganizations using “general savings,” including savings from a reduction in personnel, “which would result in a change in existing programs, projects, or activities as approved by Congress.”

This language applies to a wide swath of agencies — including the departments of Justice, Interior, Commerce and Energy, as well as the Environmental Protection Agency, the National Science Foundation and NASA.

The spending package also includes language ensuring that the National Weather Service, the Bureau of Land Management, the Fish and Wildlife Service, the Forest Service and the EPA maintain staffing levels that allow them to carry out their statutory obligations.

Democrats on the appropriations committees said the spending deal reasserts Congress’s power of the purse, and seeks to rein in the Trump administration’s repurposing of agency budgets and unilateral agency reorganizations.

The Government Accountability Office found last year that several agencies unlawfully withheld congressional appropriations last year through a process called impoundment. GAO is still reviewing dozens of cases of potential impoundment.

Republican appropriators said the spending deal reflects “current fiscal constraints,” and trims the budgets of the Interior Department, EPA and the Forest Service to reflect recent staffing cuts.

The Trump administration sought to lay off about 4,000 federal employees during the recent government shutdown. Office of Management and Budget Director Russ Vought said last October that layoffs at these agencies were justified because lawmakers allowed funds for these programs to expire, indicating they were no longer congressional priorities.

A stopgap spending bill, set to expire on Jan. 30, has put a hold on layoffs at some agencies. The Interior Department was poised to eliminate more than 2,000 positions.

Steep cuts at other agencies, however, have already gone into effect. A recent inspector general report found that the Energy Department lost about 20% of its employees in fiscal 2025 through a combination of voluntary separation incentives, retirements and “other human resource actions.”

The National Park Service and the EPA have also lost about 25% of their workforce under the Trump administration.

The minibus spending package generally seeks modest spending reductions for covered agencies, but departs from the Trump administration’s calls for major budget cuts.  It would cut the EPA’s budget by about 4% in fiscal 2026 — a far cry from the 55% budget cut the Trump administration proposed.

Lawmakers are also proposing a nearly 4% budget cut for the National Science Foundation, rejecting the Trump administration’s request to cut NSF’s budget by about 57% in FY 2026.

The minibus offers a $24.43 billion budget for NASA, a nearly 2% decrease from current spending levels. But the package rejects most of the Trump administration’s proposals to cut NASA’s science budget by nearly half and terminate 55 operating and planned missions.

Lawmakers are seeking a $160 million budget increase for the Energy Department’s Office of Science — about a 2% boost from current spending levels, rejecting the Trump administration’s calls to cut more than $1 billion from its current budget. DOE’s Office of Science supports research being conducted by 22,000 researchers at 17 national labs and over 300 universities.

Lawmakers are proposing a $3.27 billion budget for the National Park Service, about a 2% overall budget decrease. The spending plan includes flat funding for National Park Service operations. The Trump administration proposed cutting the NPS operating budget by nearly $1 billion.

The National Parks Conservation Association said in a statement that the bill includes key provisions “seeking to retain and rehire urgently needed Park Service staff, which would help restore the agency’s capacity to protect our parks, as well as require congressional notification of any plans for future mass firings.”

NPCA President and CEO Theresa Pierno said that the association had been “sounding the alarm on the need for park funding and staffing for months, and Congress listened.”

Senate Appropriations Committee Vice Chairwoman Patty Murray (D-Wash.) said in a statement that Democrats, as part of these negotiations, “defeated heartless cuts,” and are reasserting congressional control of how agencies spend appropriated funds.

Murray said language in the minibus bill prevents President Donald Trump and cabinet secretaries from “unilaterally” deciding how to spend taxpayer dollars. A yearlong continuing resolution for fiscal 2025, she added, lacked these detailed funding directives for hundreds of programs, and “turned over decision-making power to the executive branch to fill in the gaps itself.”

“Importantly, passing these bills will help ensure that Congress, not President Trump and Russ Vought, decides how taxpayer dollars are spent — by once again providing hundreds of detailed spending directives and reasserting congressional control over these incredibly important spending decisions,” Murray said.

Sen. Chris Van Hollen (D-Md.), ranking member of the committee’s subcommittee on commerce, justice, science and related agencies, said the spending package rejects the Trump administration’s deep cuts to scientific agencies, including NASA Goddard, the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology. All three agencies are based in Maryland.

“Our bill makes clear that Congress, on a bipartisan basis, will not accept this administration’s reckless, harmful cuts,” Van Hollen said in a statement.

Van Hollen said the bill “is not perfect,” but requires the Trump administration to provide more details on plans to relocate the FBI’s headquarters to the Reagan Building in downtown Washington, D.C., before it can tap into funds Congress had set aside for the project.

Before it taps into those funds, the FBI must give congressional appropriators an architectural and engineering plan for the new headquarters building.

“This is an important step to reassert Congress’s oversight role in the relocation of the FBI headquarters and to ensure the new headquarters meets the mission and security needs of the FBI,” Van Hollen said.

Committee Chairwoman Susan Collins (R-Maine) called the minibus a “fiscally responsible package that restrains spending while providing essential federal investments” in water infrastructure, energy and national security, and scientific research.

“The package supports our law enforcement and provides funding for national weather forecasting and oceans and fisheries science to save lives and livelihoods,” she said. “It provides investments in our public lands and upholds our commitments to tribal communities.”

House Appropriations Committee Chairman Tom Cole (R-Okla.) said the bipartisan spending package “reflects steady progress toward completing FY26 funding responsibly.”

House Appropriations Committee Ranking Member Rosa DeLauro (D-Conn.) said the spending package “reasserts Congress’s power of the purse.”

“Rather than another short-sighted stop-gap measure that affords the Trump Administration broader discretion, this full-year funding package restrains the White House through precise, legally binding spending requirements,” DeLauro said.

Congress has already passed FY 2026 spending bills that cover the Department of Agriculture and the Department of Veterans Affairs, military construction and the legislative branch.

The post In ‘minibus’ spending package, lawmakers reject deep budget cuts, limit agency reorganizations   first appeared on Federal News Network.

© AP Photo/Julia Demaree Nikhinson

• Veterans Affairs will no longer perform abortions in emergency cases, in light of a new legal opinion from the Justice Department. The VA started providing abortions to veterans in certain life-threatening circumstances in fall 2022. This comes after the Supreme Court ruling on the Dobbs v. Jackson case. The department began the process of rolling back the policy this summer. That process is still making its way through the official rule-making process.
  (Trump-Vance administration bans abortion care and counseling for veterans - Democracy Forward)
• Another agency CIO is heading out the door. Jeff Seaton, the NASA chief information officer, is retiring after 32 years of federal service. Seaton is taking advantage of the ability to delay his retirement under the deferred resignation program. His last day is Dec. 27. Seaton has been NASA CIO for almost five years and previously worked in senior technology roles at headquarters and at NASA Langley Research Center. The space agency is hiring a replacement for Seaton. Its job announcement said the new CIO will be a career senior executive service member. Applications for the position are due by Jan. 9.
  (NASA to hire new career CIO - USAJobs.com)
• One nonprofit is continuing to press for investigations into potential Hatch Act violations during the government shutdown. In a new letter to the Office of Special Counsel, the legal organization Democracy Forward called on OSC to open Hatch Act investigations, pointing to multiple incidents of partisan messaging during October and November. The group specifically highlights how agencies posted messages to their websites that blamed the shutdown on Democrats. And in a separate letter to the Government Accountability Office, Democracy Forward also raised potential violations of the Antideficiency Act during the 43-day shutdown.
  (Hatch Act letters - Democracy Forward)
• The Missile Defense Agency has tapped more companies to support the Golden Dome initiative. The agency has made over a thousand awards under its Scalable Homeland Innovative Enterprise Layered Defense, or SHIELD, contract worth up to $151 billion. The new awards expand a pool of pre-approved vendors eligible to compete for future task orders, bringing the total number of qualifying offerors to more than 2,000 companies. The agency said it has now transitioned to the ordering phase and drafting solicitations.
  (MDA taps more companies for Golden Dome SHIELD contract - SAM.gov)
• Defense Secretary Pete Hegseth has directed all department heads to recognize "outstanding” Defense Department civilian employees with cash bonuses. A new memo authorizes Pentagon leaders to award the top 15% of civilian employees bonuses worth 15% to 25% of their basic pay, capped at $25,000. Hegseth directed department heads to issue the bonuses by Jan. 30. The memo to recognize top talent comes amid Hegseth’s broader push to shrink and reshape the Pentagon’s civilian workforce.
  (Hegseth authorizes cash bonuses of up to $25,000 for top civilian employees - Federal News Network)
• A top official at the Centers for Disease Control and Prevention is no longer reviewing requests for telework as a reasonable accommodation for employees with disabilities. Supervisors have instructed staff to email their medical documentation directly to Lynda Chapman, the agency’s chief operating officer, to “bypass” the traditional reasonable accommodation system, and receive up to 30 days of telework as an interim accommodation. But CDC employees tell Federal News Network that Chapman no longer has access to their reasonable accommodation requests. Former CDC officials say many of the human resources staff trained to handle reasonable accommodation requests were targeted by layoffs earlier this year.
  (As HHS restricts telework, CDC asks employees to ‘bypass’ reasonable accommodation process - Federal News Network)
• House Democrats are pressing the Office of Personnel Management for answers on how the agency is addressing abnormally high volumes of federal retirement applications. In a letter sent this week, the lawmakers raised concerns about the delays retiring federal employees are currently experiencing. That’s after the Trump administration’s deferred resignation program spurred a major influx of retirement applications. The lawmakers are giving OPM Director Scott Kupor until the end of January to respond with more details on OPM’s plans.
  (House Democrats question OPM on retirement processing delays - Federal News Network)
• House Democrats are urging the Transportation Security Administration to preserve union rights for TSA airport screeners. Homeland Security Committee Ranking Member Bennie Thompson (D-Miss.) and 11 of his colleagues say TSA’s push to end union rights will not improve efficiency or security at airport screening lines. In a new letter, lawmakers urge Homeland Security Secretary Kristi Noem to keep TSA’s 2024 collective bargaining agreement in place. TSA plans to void the collective bargaining agreement effective Jan. 11. The American Federation of Government Employees is urging a federal judge to take action, pointing to a preliminary injunction that blocked TSA’s previous attempt to eliminate the union agreement.
  (House Dems urge TSA to preserve collective bargaining agreement - Federal News Network)
• The owner of a federal contractor is facing up to 90 years in prison after being indicted by a Baltimore grand jury in a scheme to defraud the government that included rigging bids for IT contracts and receiving kickbacks in exchange for influence over IT procurements. Victor Marquez is facing wire fraud charges. The Justice Department said Marquez and his co-conspirators used his access to sensitive procurement information to rig bids for procurements for large government IT contracts. Marquez allegedly received more than $3.8 million in compensation in the form of kickbacks for steering procurements to his co-conspirators, who referred to the payments to Marquez as the “Vic tax.”
  (Federal IT contractor facing charges of defrauding the government - Justice Department)

The post Veterans Affairs will no longer perform some emergency services first appeared on Federal News Network.

© The Associated Press

President Donald Trump is weighing an executive order that would push the federal government to reclassify cannabis, a step that could mark the most significant shift in U.S. cannabis policy in decades—even as the White House cautions that no final decision has been made.

The deliberations, first reported late Thursday by The Washington Post, center on moving marijuana from Schedule I—the government’s most restrictive category, reserved for drugs deemed to have no accepted medical use—to Schedule III, a classification that would acknowledge medical value and loosen some federal controls. 

“This is an encouraging development and a strong indicator that comprehensive legalization is no longer a distant goal,” says Sorse Tech CEO Howard Lee.

The Post reported Trump discussed the potential policy change in a call that included House Speaker Mike Johnson and cannabis industry executives, alongside senior administration officials. Johnson voiced skepticism, the report said, while industry participants pressed the case that rescheduling would reduce barriers to research and help normalize a legal market that now operates in tension with federal law. 

In response to the news, Sasha Nutgent, VP of cannabis retail for Housing Works Cannabis Co. out of New York, tells Cannabis Now that with today’s current cannabis classification, “retailers are not incentivized to operate legally. Reclassification would change that for thousands of businesses, especially those owned by folks from communities most impacted by the War on Drugs.”

Industry and Markets Brace for Potential Policy Change

News of the possible executive order rippled quickly through financial markets early this morning. Cannabis-related stocks and exchange-traded funds jumped in premarket trading after the Post report, according to Reuters, reflecting investor optimism that a federal shift could ease access to capital and reduce tax burdens that have long squeezed state-legal operators. 

Rescheduling, however, would not legalize marijuana nationwide. Even supporters describe it as a narrower, technical move with broad downstream effects—especially for research, medical access and business operations—rather than a sweeping rewrite of prohibition-era policy. 

Gennaro Luce, founder and CEO at CannaLnx, powered by EM2P2, argues that “Rescheduling is an important and overdue shift for patient-centric healthcare, but the move to Schedule III alone isn’t enough to make medical cannabis more accessible or affordable.”

Luce says insurers still need verification, compliance and eligibility frameworks before they can treat medical cannabis like a real benefit. “That part of the system is still missing from the national conversation — fortunately, it’s the medical-cannabis system piece we’ve already built and tested alongside physicians, patients, dispensaries, POS systems and insurers.”

Legal Nuances Stall Progress

President Trump’s considerations land on well-trodden terrain. The modern push to reconsider cannabis’ federal classification accelerated under President Joe Biden, whose administration initiated a review that produced a recommendation from the Department of Health and Human Services to move cannabis to Schedule III. The Justice Department formally began the rescheduling process in 2024, opening the door to rulemaking that has since faced delays and political crosscurrents. 

Policy experts say an executive order can direct agencies and set priorities, but it cannot, by itself, rewrite the Controlled Substances Act. Any durable change to cannabis scheduling ultimately runs through federal administrative procedures led by the Justice Department and the Drug Enforcement Administration, including scientific findings, legal analysis and formal rulemaking steps. That legal nuance has become familiar to cannabis readers—and to anyone who has watched the issue ricochet between campaign promises and bureaucratic reality.

In past coverage of cannabis executive action, Cannabis Now has emphasized that the “stroke of a pen” theory often collides with the limits of federal authority, even when presidents or governors have wide latitude to shape enforcement priorities and regulatory posture. Still, the political stakes are unmistakable. A Trump-backed push to reschedule could scramble the usual partisan map on cannabis, where national Democrats have often positioned themselves as the party of reform while Republicans have been divided between states’-rights advocates and prohibition-aligned lawmakers.

The Post report suggested Trump views rescheduling as a way to “cut restrictions” without endorsing full legalization—a framing that could appeal to voters who support medical access and regulated markets but remain cautious about broader social change. 

For the cannabis industry, the practical implications of Schedule III are potentially enormous—but also uneven. Operators have argued that rescheduling could reduce certain federal tax penalties and make it easier for institutions to do business with cannabis companies.

Ryan Hunter, chief revenue officer for Colorado-based Spherex, a leader in cannabis extraction and purification, offers perspective: “Cannabis is still federally illegal—but even as a federally illegal substance, the move to Schedule III dramatically reduces the federal tax burden for operators. Under IRS code 280E, handling Schedule I or Schedule II substances eliminates the ability for operators to deduct standard operating expenses that most other businesses deduct from their federal taxes. As a result of 280E, cannabis operators’ effective tax rate may be as high as 80 pecent. Beyond this significant improvement, the implications are unclear, but we’re hopeful that this move will allow for cannabis operators to garner the same investment opportunities other industries will enjoy.”

Rescheduling’s Promise and Uncertainty

Analysts told Reuters that shifting cannabis to Schedule III could also accelerate pharmaceutical research and distribution models, even as state-legal markets continue to rely on a patchwork of rules that vary widely from one jurisdiction to another. Critics, including some in Congress, argue rescheduling risks moving faster than the science. The Post reported Johnson referenced studies he said cut against reclassification, reflecting a broader debate over how to weigh evidence of therapeutic benefits against risks of misuse and dependency. 

What happens next could hinge on timing and follow-through. An executive order, if issued, would likely instruct cabinet agencies to prioritize or expedite the administrative process rather than instantly change marijuana’s legal status. Even then, opponents could challenge the move politically and in court, while regulators would still need to align policy with existing federal statutes and international commitments.

“Whenever the White House moves forward with Schedule III, the federal government is effectively telling us that cannabis is medicine,” comments Calyx Containers President and Co-Founder Alex Gonzalez. “And if it’s medicine, ‘good enough’ cannabis practices won’t cut it anymore. Whether rescheduling happens next month or next year, the direction is clear: Cannabis is moving toward pharma-grade standards. For brands, that means tightening quality systems, investing in the ability to react or scale, and preparing for a regulatory-ready supply chain. We’re seeing the smart operators onshoring infrastructure, and we’re positioning our domestic production and business model on being ready to help operators turn this moment into a competitive advantage.”

In the meantime, the national reality on cannabis continues to diverge from federal law. Most states now allow marijuana for medical use, and a growing number permit adult-use sales—a shift that has normalized cannabis commerce for millions of Americans while leaving businesses and consumers navigating legal gray zones that are invisible at the dispensary counter but very real at banks, research institutions and federal agencies.

“Rescheduling is the single most important drug policy move in decades. The potential opportunities for medical and scientific research will significantly increase, while those living in states without an existing medical program will now have access to the powerful healing properties of the plant,” says Mark Lewis, president of specialty banking at Lüt.

“Make no mistake though, rescheduling is just the beginning for those working in the cannabis industry. Until the SAFE Banking Act or 280E is passed, operators will still have to jump through challenging financial hoops to pay their staff, bills or garner investment. The moment is historic, but until cannabis businesses can operate fiscally with the same ease as any other business, more work needs to be done,” Lewis continued. “Payments still need to work in the reality of today, where the ongoing threat of card network shutdowns exists, not just the promise of future reform. While rescheduling may open doors over time, it does not remove the day-to-day financial friction that cannabis operators face right now.”

Whether Trump ultimately signs an order or backs away, the past 24 hours have underscored a core truth of cannabis politics in Washington: Even incremental change can move markets, reshape messaging and reopen debates that Congress has struggled for years to settle.

The post Trump Weighs Executive Order to Advance Cannabis Rescheduling appeared first on Cannabis Now.

Cryptocurrency exchange Bitzlato, better known to the Russian-speaking segment of the market, has been taken down as part of an “international cryptocurrency enforcement action,” the U.S. Justice Department announced. The Russian owner of the platform has been arrested for his role in the alleged transmission of illicit money. Bitzlato claimed it was hacked.

US, France Hit Cryptocurrency Exchange Bitzlato, Russian Co-founder Detained in Miami

U.S. authorities have apprehended Anatoly Legkodymov, a resident of China, on charges that his Hong Kong-registered crypto trading platform, Bitzlato, processed illicit funds worth hundreds of millions of dollars. The Russian, a co-founder and majority owner of the exchange, was arrested by the FBI in Miami on Tuesday, a high-ranking official from the United States Department of Justice (DOJ) revealed.

Speaking during a press conference, Deputy Attorney General Lisa Monaco said that Justice Department agents and prosecutors, working with the U.S. Treasury Department and French law enforcement, have “disrupted Bitzlato, a China-based cryptocurrency exchange, notorious for laundering criminal proceeds from the darknet” and ransomware attacks. She also stated:

Today, the Department of Justice has dealt a significant blow to the crypto crime ecosystem.

Legkodymov is accused of operating the exchange as a “high-tech financial hub that, in his own words, catered to ‘known crooks’,” Monaco explained. She went on to allege that Bitzlato was a “crucial financial resource” for Hydra, the largest darknet market, with Russian roots, which was shut down in April, last year, by the German police with the support of U.S. agencies.

According to the DOJ, Hydra buyers funded illicit purchases from crypto accounts hosted at Bitzlato while sellers of drugs, stolen financial information and hacking tools sent criminal proceeds to accounts at the exchange, collectively amounting to $700 million in direct and indirect transfers between 2018 and 2022.

The deputy attorney general also said that the participants in the operation have engaged in a “coordinated campaign of disruption.” This included law enforcement actions in a number of European countries and the seizure of Bitzlato’s servers. By midday Wednesday, Bitzlato’s website was replaced by a notice saying that the service had been seized by French authorities, Reuters reported.

Crypto Exchange Bitzlato Claims It Was Hacked, Halts Withdrawals

Also on Wednesday, the operators of Bitzlato announced on Telegram, that the exchange had suffered a hacking attack. They told users that withdrawals had been suspended indefinitely and asked them to refrain from sending coins to the platform until the issue is resolved.

“Our service was hacked, part of the funds was withdrawn from the service,” the exchange said, noting that the attackers were able to steal a small portion of the funds without specifying the amount. It also sought to assure customers in a second message that their assets were not lost, stating:

For all victims, we guarantee a refund.

“As a security measure, we have disabled the service, we ask you not to replenish the wallets of our service until the work is restored,” Bitzlato reiterated, adding that its team was working on the problem. At the time of writing, the platform is still offline.

The hack presumably took place after on Tuesday the exchange announced maintenance scheduled for Thursday, Jan. 19, “aimed at improving the operation of the service and its security.” The notice informed users it will halt transactions between 5 and 9 a.m. Moscow time.

“We strongly recommend that you organize your work activities taking into account the amendments in order to avoid unpleasant situations,” the platform advised customers, informing them that it plans to disable deposits, withdrawals and trading.

Bitzlato launched in 2016 under the name Changebot and later became a cryptocurrency exchange offering peer-to-peer (P2P) trading services. It lists pairs of the Russian ruble with BTC, ETH, USDT, and other digital coins which can be bought and sold with a variety of payment methods.

Online crypto exchangers like Bitzlato are popular in Russia and the former Soviet space but as crypto assets are yet to be fully regulated in the region, they are often targeted by authorities across the Commonwealth of Independent States. A report recently revealed that the Belarusian judiciary has imposed a hefty fine on the operator of one such platform.

Do you expect other similar operations against crypto trading platforms in the near future? Share your thoughts on the subject in the comments section below.