Following Acting Attorney General Todd Blanche’s April 23, 2026, final order reclassifying state-licensed medical marijuana and FDA-approved marijuana products from Schedule I to Schedule III of the Controlled Substances Act, Leading Retirement Solutions (LRS) has been closely evaluating what this long-anticipated shift actually means for retirement plan access in the cannabis industry.
“As exciting as this change is, it doesn’t automatically translate into open access to 401(k) plans or institutional custodians,” noted Kirsten Curry, founder of LRS1. “There’s a meaningful gap between regulatory reclassification and how financial institutions, recordkeepers, and fiduciaries adjust their risk tolerance in practice.”
With decades of combined experience navigating ERISA compliance and cannabis-specific complexities, the LRS team continues to guide employers through what remains a highly nuanced landscape.
To separate expectation from operational reality, Kirsten sat down with Jewell Lim Esposito of Trust Integritas2 to ask a practical question many cannabis employers are now facing:
What does this change really mean for cannabis companies and their ability to offer 401(k) plans, especially in adult–use markets?
Jewell’s answer was direct and grounded in employer reality.
The Schedule III reclassification is meaningful, but its impact is being overstated. The reclassification does not materially improve retirement plan access for adult-use or recreational cannabis businesses.
The first issue is scope. The reclassification applies to only state-licensed medical marijuana and FDA-approved marijuana products. Adult-use cannabis remains illegal at the federal level. That distinction is not academic. It drives how financial institutions, retirement plan providers, and regulators continue to regard and treat these companies.
At the same time, many states continue to require employers, regardless of industry, to offer a retirement plan. Adult-use cannabis companies are therefore caught in a bind. They are legally required at the state level to provide a plan while still facing limited access to compliant 401(k) providers because of ongoing federal illegality. The Schedule III change does not meaningfully reduce provider risk or expand provider participation for adult-use employers.
Internal Revenue Code Section 280E compounds the problem. While Schedule III status may offer tax relief to qualifying medical marijuana operators, 280E remains fully in force for adult-use businesses. Section 280E still limits these companies from deducting ordinary and necessary business expenses, including many forms of retirement plan contributions. The result is higher effective costs for funding a traditional 401(k) compared to employers in other industries.
This is where it becomes important to recognize that not all retirement plans, and not all providers, are the same. A standard, off-the-shelf 401(k) is not always workable for cannabis businesses operating under federal constraints. Treating it as a default solution often ignores both tax exposure and provider reluctance.
In some cases, an ESOP (employee stock ownership plan where the plan holds employer securities, and not a stock option plan that allows employees to buy shares of company stock) can serve as a viable alternative. A properly structured ESOP can satisfy state-mandated retirement plan requirements while materially mitigating the impact of Section 280E’s effects on not only employer contributions but other operating expenses of the adult-use operator. It is not a universal solution, and it is not appropriate for every company, but for certain adult-use operators, it can significantly enhance cash flow (as there are no longer state or federal income taxes to the adult-use operator) and improve the economics of providing a state-mandated retirement benefit to the operator’s employees.
Provider compliance risk has not gone away. Custodians, recordkeepers, and trustees remain subject to federal anti-money-laundering laws. As long as adult-use cannabis remains illegal federally, many providers will continue to require enhanced due diligence, ongoing monitoring, and regular certifications related to diversion, trafficking, and sales to minors. For some providers, that burden is still too high, regardless of the Schedule III announcement.
The complexity increases further for companies operating both medical and adult-use divisions. The Internal Revenue Code’s aggregation rules typically require employees of related entities to be covered under a single retirement plan. If adult-use operations are included, relief tied to medical marijuana companies does not automatically extend to the plan as a whole. Employers must be intentional about entity structure, plan design, and permissible investments to avoid creating a plan that providers will not support or contributions that cannot be accepted.
The bottom line:
The Schedule III reclassification represents incremental progress for medical marijuana, but it does not resolve the retirement plan access problem or the Section 280E impact for adult-use cannabis businesses.
As advocates for the cannabis industry, both Kirsten Curry of Leading Retirement Solutions and Jewell Lim Esposito of Trust Integritas emphasize that employers, policymakers, and the public should not mistake regulatory movement for a complete solution. Until federal legality is addressed more broadly, cannabis retirement planning will continue to require thoughtful, customized strategies rather than default 401(k) solutions.
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1 Kirsten Curry is the founder and CEO of Leading Retirement Solutions, a retirement plan provider serving employers nationwide, including cannabis operators historically excluded from traditional financial services. With a legal background and more than a decade of experience supporting cannabis businesses, Curry has been a leading advocate for compliant, accessible retirement solutions in highly regulated industries.
2 Jewell Lim Esposito serves as a Managing Member of Trust Integritas, a corporate consultant to cannabis companies who must negotiate procurement of retirement, health, welfare, and executive compensation plans. Esposito also is an ERISA (Employee Retirement Income Security Act) and Tax attorney who navigates the legal intersections of the ERISA, the Internal Revenue Code, and the cannabis industry.
