In a significant shift for the cannabis industry, marijuana is set to be reclassified as a Schedule 3 controlled substance. While this change does not address the ongoing federal prohibition, removal of the 280E IRS tax code will have substantial consequences for the cannabis space, particularly for retailers and plant-touching operators.

Tax Relief And Financial Implications

The rescheduling will greatly benefit the tax framework affecting cannabis companies. Historically hindered by the punitive Section 280E of the IRS code, which prevented businesses dealing with federally illegal substances from deducting ordinary business expenses, the industry faced an excessive tax burden. These figures from Whitney...