How cannabis rescheduling affects promotional products
The potential rescheduling of cannabis is a meaningful and long-overdue shift. Especially overdue for those people who use cannabis as medicine without legal access to it in their state.
For those wondering how cannabis rescheduling affects promotional products, the biggest impact won’t be on operators already in the space. The biggest impact will be on the many businesses that have been hesitant to engage with cannabis promotional products at all due to its Schedule I status. Removing that stigma and legal uncertainty will unlock participation across the broader promotional products and marketing ecosystem.
For our business, the impact would be largely positive.
More vendors willing to participate
Cannabis rescheduling affects promotional products at all levels. The greatest immediate effect will be on decorators, distributors, and suppliers who have historically avoided cannabis-related work because of legal risk. Rescheduling lowers perceived exposure and encourages more of these companies to enter or re-enter the space.
When we started exhibiting at ASI shows nearly a decade ago, people walked by our booth quickly so no one would catch them checking out our products. The next year they walked by a little more slowly, face covered but peeking at our products through their fingers. That turned into checking out our products “just out of curiosity”. Fast forward to 2026, people are seeking out our booth because they want a piece of the industry.
A wider range of businesses will choose cannabis promotional products… not just those in cannabis.
Beyond cannabis operators themselves, rescheduling will impact several adjacent verticals. That is businesses that are not directly involved with cannabis but have a cannabis friendly following. That is those normally legal industries like banks, insurance companies and marketing agencies that support cannabis growers, farms and dispensaries.
Pro tip… Distributors waiting for cannabis to be legal in their state are already way behind. I get so frustrated when I meet people who automatically dismiss our catalog because, “weed is not legal in my state. I’ll get back to you when it is” The distributors who really want a piece of the cannabis promotional product category will think outside of the obvious. Dispensaries and head shops are clear areas in need of branded cannabis promotional products but not necessarily the big earners that everyone thinks they are.
Unless you are dealing with a chain, most head shops will buy one run of products and sit on them until they are sold. That could take months. Even used as giveaways, most head shops do not have a lot of turnover when it comes to branded merchandise. Dispensaries that are stand alone and not part of a chain are similar to head shops when it comes to turnover. Chain dispensaries have larger turnover but they typically have one corporate buyer per region. If you can find out who that is, you will have to compete with everyone else who is targeting dispensaries.
Since we started offering cannabis promotional products 16 years ago, it has been interesting to see what types of businesses seek us out. Outside of head shops and dispensaries there are some obvious outliers like bands, lifestyle brands and cannabis themed events. And then there are the less obvious like, banks, weddings, breweries and real estate agents. Promotional products distributors should cast a wider net. There is far more opportunity on the horizon than can be seen at first glance.
Reduced customs scrutiny and import risk
Cannabis-branded promotional products often face heightened scrutiny at customs. A lower classification could reduce delays and seizures, which would improve reliability in inventory restock and decoration turn times. Currently, because of customs risk, our imported products are manufactured and shipped months in advance. We stock hundreds of skus in advance so that they are available and ready to decorate when a client orders. This allows us to turn over orders in 10 days or less. We avoid making promises on delivery times for products we cannot physically see on the shelf. This change would ease those constraints.
Merchant processing improvements
Payment processing remains a major friction point for cannabis companies. Rescheduling will lead to lifted or eased merchant processing restrictions, making it easier for cannabis brands to operate, scale, and purchase promotional products.
Rescheduling will also reduce the cost of merchant processing itself. Cannabis companies, and many companies that support them, have to pay high risk merchant processing fees to take credit card payments. With reclassification, I expect that the merchant processing fees we pass on to our clients will also be reduced.
State-level opportunity expansion
There are currently 24 states that allow for recreational use of cannabis and 47 states have a program for adult medical use. With reclassification, we can expect cannabis companies in more states will come on line as the remaining states legalize. That will drive a need for more cannabis promotional products in evolving states.
The end of advertising penalties for cannabis brands
States with especially strict cannabis advertising rules—such as Ohio—will become more open to cannabis promotional products. A lower federal classification also helps open the door in states that are not yet fully legal but are moving in that direction. Moving cannabis to Schedule III would eliminate certain criminal penalties for advertising, which would meaningfully reduce risk for brands, marketers, and promotional partners alike.
Some penalties for marijuana under the Controlled Substances Act are specific to its Schedule I classification. For example, CSA advertising offenses are written specifically for Schedule I. It says, “It is unlawful knowingly ‘to place in any newspaper, magazine, handbill, or other publications, any written advertisement [that] has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance.” “The penalties for doing so are up to four years in prison and/or a criminal fine.” These penalties would no longer apply if marijuana moves to Schedule III.
With Schedule I advertising penalties no longer applicable, agencies, publishers, and media platforms will be more comfortable accepting cannabis-related work.
Pain Points to Expect
While rescheduling is a major step forward, it doesn’t eliminate all friction. Here are a few other pain points that promotional product distributors, wholesalers and decorators should expect in the short term:
Customs and importing
Global supply chain hurdles continue to make importing slower and more expensive. This will continue to be true but not for the same reasons. While we expect customs to be friendlier to companies who import cannabis related products, there are new problems to consider, tariffs. Tariffs seem to be changing regularly without notice. Most of our products are made on demand and take weeks to produce. We have seen major tariff increases midway through production forcing us to pay the higher tariffs upon shipping. We do not expect the customs risk to disappear overnight, so cautious inventory planning will still be necessary.
The death of head shops
Based on legislation signed in November 2025 (specifically the FY2026 Agriculture appropriations law), a new federal ban on most consumable, intoxicating hemp-derived products is set to take effect on November 12, 2026.
This does not end all cannabis. It effectively terminates the “high-THC hemp” industry (Delta-8, THCA flower, infused edibles/drinks) that grew out of a loophole in the 2018 Farm Bill. Estimates suggest 95% of the current intoxicating hemp industry will be eliminated. This change is considered an”extinction-level” event for the hemp industry. With this change to the hemp farm bill, thousands of head shops will be closing their doors. This is actually the largest impact to cannabis in a long time. Probably more significant than cannabis legalization itself.
Bottom line
Despite the heavy scrutiny cannabis has had since the beginning, the future looks optimistic. Rescheduling cannabis affects promotional products much the same way it will most other categories. It will reduce friction, normalize participation, and largely expand opportunity across cannabis and adjacent industries. The biggest winners will be the businesses that are ready but waiting. Those companies that are already positioned to support that next phase of growth will now see the biggest returns.
The big losers will be the head shop space. That is unless they can successfully lobby Congress for a legislative fix or alternative regulations before the November 2026 deadline. Fortunately, our inventory is already in stock and ready to decorate on demand. Because of this, Smoke Promos is positioned to support our distributor partners with finished products and updated information in the ever evolving world of cannabis. No matter what happens with cannabis rescheduling, the affects on promotional products will be positive.