On August 27, 2025, chaos erupted in the Mexican Senate as lawmakers clashed—literally—over the nation’s ongoing struggle with powerful drug cartels and the question of whether the United States should intervene militarily. As tempers flared and fists flew in Mexico City, another drama was unfolding north of the border, where President Donald Trump is preparing to make a move that could upend the balance of power in the international drug trade without firing a single shot.
The brawl in Mexico’s upper chamber, widely reported by CBS News and OutKick, was sparked after a heated debate about a potential U.S. military strike on the cartels. Opposition leader Alejandro Moreno, frustrated at being denied the floor, confronted Senate president Gerardo Fernandez Norona. What followed was anything but parliamentary decorum: a full-blown fistfight that left the chamber in disarray and underscored the depth of Mexico’s political turmoil.
This spectacle comes as Mexico, under the leadership of President Claudia Sheinbaum, grapples with the reality that drug cartels control vast swaths of its territory. Critics, including OutKick, have described the situation as “borderline a failed narco state.” President Trump has openly offered to deploy the U.S. military to “solve the problem,” but Sheinbaum has repeatedly declined the offer, a stance that continues to baffle many observers on both sides of the border.
While lawmakers in Mexico were literally at each other’s throats, President Trump was weighing a decision that could strike at the heart of cartel profits: the reclassification of cannabis under U.S. federal law. For decades, cannabis has been listed as a Schedule I substance—alongside heroin—making it, in the eyes of the federal government, more dangerous than fentanyl, cocaine, or methamphetamine. This classification has had profound consequences for the burgeoning legal cannabis industry in the United States.
According to IVN’s April 2025 coverage, the current classification has left legal cannabis businesses unable to deduct ordinary business expenses from their taxes, thanks to the IRS’s Section 280E. This provision, designed to penalize illegal drug traffickers, has ironically crippled licensed U.S. operators, making it nearly impossible for them to compete with the very criminal cartels the law was meant to target.
Now, President Trump is reportedly considering whether to move cannabis from Schedule I to Schedule III—a change that would finally recognize its medical uses, open new avenues for research, and, crucially, lift the tax burdens that have hamstrung legal operators. As IVN notes, "If Trump makes his move, the balance of power in the cannabis trade could change overnight. One decision in Washington could hit the cartels harder than any Senate brawl in Mexico City."
But there’s a twist. Recent reports indicate that the administration is also considering a more conservative route: reclassifying cannabis as a Schedule II substance instead. While this would still acknowledge medical value and permit more research, it would leave the IRS’s 280E penalty firmly in place. In practical terms, this means legal cannabis businesses would still be unable to deduct normal expenses like rent, payroll, and marketing—leaving them at a continued disadvantage.
To understand the stakes, it’s helpful to look at what separates Schedule II from Schedule III. Schedule II substances, such as oxycodone, fentanyl, methamphetamine, and even cocaine (in some limited medical contexts), are considered to have a high potential for abuse but recognized medical uses. Prescriptions for these drugs can’t be refilled and are tightly controlled. Businesses handling Schedule II drugs remain subject to 280E, and research is still highly restricted.
Schedule III substances, on the other hand, are deemed to have a moderate to low potential for abuse. This category includes ketamine, anabolic steroids, and low-dose codeine mixtures. Prescriptions can be refilled, research is less restricted, and—most importantly—Section 280E does not apply. That means businesses can deduct their ordinary operating costs, leveling the playing field with illicit competitors.
On August 11, 2025, President Trump addressed the issue directly in a White House news conference, stating, "We're looking at reclassification, and we'll make a determination over the next—I would say over the next few weeks, and that determination hopefully will be the right one. It's a very complicated subject." (IVN, August 2025) The ambiguity has left the industry and advocates in suspense.
Trump’s nominee to lead the Drug Enforcement Administration, Terrance Cole, added to the uncertainty. During his April Senate confirmation hearing, Cole said that rescheduling cannabis was a priority, but he later walked back any specific commitments. As IVN reported, "he has not committed publicly to anything," leaving stakeholders guessing about the administration’s true intentions.
Behind the scenes, pressure has been mounting. In July, boxing legend Mike Tyson publicly urged Trump to "make good" on his rescheduling promise (IVN, July 2025). By August, the Wall Street Journal reported that a rescheduling report was sitting on Chief of Staff Susie Wiles’s desk, awaiting presidential action (IVN, August 2025).
The stakes for the legal cannabis industry are enormous. If Trump opts for Schedule III, it would be the first time in over five decades that a president has meaningfully shifted federal cannabis policy. Such a move would open the floodgates for research, investment, and growth, finally allowing legal businesses to compete with illicit suppliers on a level playing field.
If, however, the administration chooses Schedule II, the practical impact would be minimal. As IVN explains, "Schedule II would represent a symbolic acknowledgment of medical value without providing the practical relief that industry stakeholders have sought for years." The IRS penalty would remain, research would still be tightly controlled, and cannabis would continue to be grouped with some of the most dangerous drugs in the federal system.
Meanwhile, the violence and chaos in Mexico’s Senate reflect the broader crisis facing the country. As OutKick’s coverage points out, "Mexico is governed by far-left leader Claudia Sheinbaum and faces significant issues with drug cartels controlling large territories, bordering on a failed narco state." Trump’s offer to use the U.S. military to target the cartels has only heightened tensions, with Sheinbaum steadfastly refusing outside intervention.
The fight among Mexican lawmakers—triggered by opposition leader Alejandro Moreno’s confrontation with Senate president Gerardo Fernandez Norona—serves as a vivid metaphor for the nation’s struggle to assert control over its own destiny. As OutKick quipped, "If Mexico showed this kind of fight on a regular basis, then maybe the cartels wouldn't be running the show."
Ultimately, the next few weeks will be pivotal. President Trump’s decision on cannabis rescheduling will not only shape the future of the American cannabis industry but could also deliver an economic blow to the cartels that no military action has yet achieved. Whether the administration chooses meaningful reform or a symbolic gesture, the outcome will reverberate from Washington to Mexico City—and beyond.
One thing is clear: the balance of power in the drug trade, and the future of two nations’ policies, now hangs on a single decision in the White House.
