NEW YORK, NY / ACCESS Newswire / December 18, 2025 / The conversation around cannabis reclassification, which was formalized through an executive order signed on Thursday, has focused heavily on policy and capital. Far less attention has been paid to operations. That imbalance matters, because regulatory transitions rarely fail at the headline level. They fail inside systems.

Federal oversight does not disrupt markets first. It disrupts workflows.

As cannabis moves toward a federally recognized framework, the biggest challenges will not be political or cultural. They will be practical. How data is captured. How inventory is reconciled. How records are stored, retrieved, and defended. These are the pressure points where industries either adapt or stall.

State-era cannabis operations were built for speed and local compliance. Federal oversight demands precision and durability. The kind that companies like SMX (NASDAQ:SMX) are designed to deliver.

Where state-built systems begin to crack

Most cannabis operators rely on tracking systems designed to satisfy state reporting requirements. Those systems prioritize visibility over verification. They show activity, but they do not always prove integrity.

Under federal scrutiny, that distinction becomes consequential. Federal regulators expect records that can be audited years after the fact. They expect chain-of-custody continuity across cultivation, processing, transport, and distribution. They expect discrepancies to be explainable without reconstruction or interpretation.

Many existing systems were never designed for that level of rigor.

Manual reconciliation, spreadsheet dependencies, and fragmented data sources introduce failure points that remain invisible under light oversight. Federal normalization exposes them quickly.

Seed-to-market becomes an operational discipline

Seed-to-market tracking is often discussed as a compliance requirement. Under federal oversight, it becomes an operational discipline.

Every handoff matters. Every transformation must be logged. Every variance must be accounted for. The burden shifts from periodic reporting to continuous accountability.

This transition forces operators to rethink how data is generated, not just how it is submitted. It requires systems that align physical materials with digital records in real time, not after the fact.

Industries that underestimate this shift experience bottlenecks. Audits slow distribution. Approvals stall expansion. Compliance costs rise faster than revenue.

This is not unique to cannabis. It is a familiar pattern in regulated industries.

Why infrastructure determines operational resilience

As oversight tightens, operators face a choice. Patch existing systems or adopt infrastructure designed for verification.

This is where companies like SMX enter the operational conversation. SMX focuses on traceability and verification across complex supply chains, environments where documentation must reconcile with physical reality and withstand scrutiny over time.

The relevance here is functional, not promotional.

Infrastructure built for verification reduces audit friction. It minimizes manual reconciliation. It allows compliance to operate continuously rather than episodically. Those advantages become decisive as oversight increases.

Operators that rely on reporting-centric systems will find themselves reacting to regulators. Operators with verification-centric systems can operate ahead of them.

Operational readiness becomes a competitive divide

Federal normalization does not eliminate competition. It changes its basis.

Speed matters less than accuracy. Expansion matters less than reliability. And, branding matters less than documentation. Accordingly, operators that treat reclassification as a compliance upgrade will struggle. Those who treat it as an operational redesign will adapt.

This transition also affects partnerships, research participation, and access to federally aligned programs, which increasingly favor operators that can demonstrate control without extensive remediation.

Execution is the real filter

Markets often treat regulatory change as an opening. Operators experience it as a filter.

Federal oversight rewards companies that can execute within structured environments. It penalizes those built for flexibility without discipline. In this case, cannabis reclassification will not reshape the industry overnight. It will reshape it gradually, through audits, approvals, and operational stress tests.

The companies that pass those tests will not be the loudest or the fastest. They will be the most prepared. Execution, not enthusiasm, decides who makes it through the next phase.

About SMX

As global businesses face new and complex challenges relating to carbon neutrality and meeting new governmental and regional regulations and standards, SMX is able to offer players along the value chain access to its marking, tracking, measuring and digital platform technology to transition more successfully to a low-carbon economy.

Forward-Looking Statements

The information in this press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intends," "may," "will," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release may include, for example: matters relating to the Company's fight against abusive and possibly illegal trading tactics against the Company's stock; successful launch and implementation of SMX's joint projects with manufacturers and other supply chain participants of steel, rubber and other materials; changes in SMX's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; SMX's ability to develop and launch new products and services, including its planned Plastic Cycle Token; SMX's ability to successfully and efficiently integrate future expansion plans and opportunities; SMX's ability to grow its business in a cost-effective manner; SMX's product development timeline and estimated research and development costs; the implementation, market acceptance and success of SMX's business model; developments and projections relating to SMX's competitors and industry; and SMX's approach and goals with respect to technology. These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing views as of any subsequent date, and no obligation is undertaken to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: the ability to maintain the listing of the Company's shares on Nasdaq; changes in applicable laws or regulations; any lingering effects of the COVID-19 pandemic on SMX's business; the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; the risk of downturns and the possibility of rapid change in the highly competitive industry in which SMX operates; the risk that SMX and its current and future collaborators are unable to successfully develop and commercialize SMX's products or services, or experience significant delays in doing so; the risk that the Company may never achieve or sustain profitability; the risk that the Company will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the risk that the Company experiences difficulties in managing its growth and expanding operations; the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations; the risk that SMX is unable to secure or protect its intellectual property; the possibility that SMX may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described in SMX's filings from time to time with the Securities and Exchange Commission.

Contact: info@securitymattersltd.com

SOURCE: SMX (Security Matters) Public Limited