Author: CannabisNewsWire (CNW)

About CannabisNewsWire CannabisNewsWire (CNW) is an information service that provides (1) access to our news aggregation and syndication servers, (2) CannabisNewsBreaks that summarize corporate news and information, (3) enhanced press release services, (4) social media distribution and optimization services, and (5) a full array of corporate communication solutions. As a multifaceted financial news and content distribution company with an extensive team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. CNW has an ever-growing distribution network of more than 5,000 key syndication outlets across the country. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled visibility, recognition and brand awareness. CNW is where news, content and information converge. To receive SMS text alerts from CannabisNewsWire, text “CANNABIS” to 21000 (U.S. Mobile Phones Only) For more information please visit https://www.CannabisNewsWire.com Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: http://CNW.fm/Disclaimer

420 with CNW — Report Says NY Marijuana Program Has Undergone Successful Moments, Growing Pains

New York authorities recently published a comprehensive report on the progress of the state’s cannabis legalization law, which was signed by former Governor Andrew Cuomo in 2021. The state’s cannabis management office (OCM) shared the document, outlining the advancements made toward achieving the law’s primary goals.

The outlined advancements include fostering equity and creating opportunities for groups that have been disproportionately impacted by marijuana prohibition, building a strong and thriving industry, and preserving the environment, among others.

Tremaine Wright, head of the state marijuana control board, stated, “This report demonstrates our dedication to transparency and equity. I’m proud of how far we’ve come in the last three years to create a strong foundation for New York’s marijuana industry. Our objective has always been establishing a just and equitable industry that addresses historical wrongs and forges ahead with new prospects.”

According to the report, the state has licensed 200 cannabis retail dispensaries, with more than 1,300 recreational cannabis business licenses issued in total. The report also noted that54.7% of the licenses have gone to applicants from economic and social equity backgrounds. Additionally, most cannabis users are now purchasing from legal sources. According to the report, 67% of consumers who used marijuana in the past year said they bought their products from licensed dispensaries.

Another significant result of the law is the expungement of marijuana-related criminal records. More than 200,000 convictions have already been sealed, while an additional 107,000 are awaiting the same process. Furthermore, the report confirms that no one in the state is currently incarcerated for marijuana-related offenses alone.

In terms of consumer habits, the report noted that as of 2022, 14.9% of New Yorkers 18 years of age and older used marijuana monthly, with 7% reporting daily use. In addition, 52% said they used cannabis for recreational purposes, while 13.5% were medical users. Meanwhile, 34.5% reported using cannabis for both medical and recreational purposes.

The enforcement section of the report emphasizes that enforcing cannabis laws is crucial to maintaining a level playing field for legal operators. The report highlights that enforcement protects the investments of legal entrepreneurs while holding those selling illegal and unsafe products accountable.

The report acknowledges the struggles faced during the market’s initial phase, such as delays in rolling out the market, leadership disputes and issues surrounding the cannabis social-equity fund. It states that there is still much to do, including refining data collection, improving customer service, educating consumers and tackling the illegal marijuana market. Nonetheless, the officials are upbeat about the potential success of the sector.

The progress that is being made in rolling out the adult-use marijuana program in New York State is being watched positively by the entire industry, including entities such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) that would like to see all adults who use marijuana obtaining it from a licensed source.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — Survey Finds Difference in View of Chronic Pain Patients, Doctors on Medical Cannabis

If you suffer from chronic pain and think medical cannabis could help, your doctor may not always share the same opinion. A recent survey of individuals living in states with legalized medical cannabis revealed significant differences in opinions between patients and healthcare providers.

According to the survey, which included responses from 1,000 doctors and 1,600 chronic pain patients, 71% of patients felt the federal government should legalize cannabis. However, only 59% of doctors agreed with this view. The survey also showed that 64% of patients believed that medical marijuana should be covered by health insurance, while 51% of doctors supported this idea.

The divide became even more evident when discussing the legalization of recreational cannabis. Fifty-five percent of patients felt it should be legalized across the United States, but only 38% of doctors shared this view. According to Elizabeth Stone, the study’s lead author, patients with chronic pain were generally more in favor of policies that increased access to medicinal marijuana, while healthcare practitioners tended to favor policies that limited its availability.

Currently, the availability of recreational and medical cannabis varies greatly depending on the state. Medical marijuana is legal in 38 states and Washington, DC. Additionally, 23 of these states have legalized the substance for recreational use.

According to Stone, one of the reasons cannabis stands out is the regulatory environment. “Marijuana use for medical or recreational purposes may be lawful, or neither may be permitted at all depending on where you live,” she said.

The survey primarily focused on adults suffering from noncancer chronic pain lasting six months or longer, as well as primary care doctors and specific specialists. Interestingly, most patients who had previously used medical cannabis and potentially experienced relief supported expanded access. On the other hand, doctors who had never recommended cannabis for pain relief were more hesitant to support broader legalization efforts.

Despite differing views, both patients and doctors largely agreed on one thing: 70% of both groups believed that medical schools should educate future physicians about medical cannabis and its potential use in pain management.

“All of this indicates a need for further guidance on the use and effectiveness of marijuana for medical purposes,” Stone stated. Questions about which patients should be recommended medical marijuana and what forms, dosages or methods of use are most appropriate remain topics for future research and policy development.

Pointers to the answers to some of those questions can be gleaned by examining the data that entities such as TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) have collected over time regarding the different ways in which medical marijuana users use medicinal cannabis.

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420 with CNW — Newsom Signs Measure Authorizing Cannabis Cafes to Operate in California

California Governor Gavin Newsom approved a measure that will allow the operation of marijuana cafés, modeled after those in the Netherlands. The law is set to come into effect on Jan. 1, 2025, subject to local government approvals.

Last year, Governor Newsom vetoed a similar proposal from Assembly Member Matt Haney, which would have permitted California’s cannabis retailers to run full kitchens and host events. Newsom’s main concern at the time was the lack of adequate worker protections in the bill.

In his latest signing statement, he expressed support for Haney’s improvements to the current bill. These changes include protecting employees’ right to wear masks, with employers covering the costs, and requiring that workers be informed about the dangers of secondhand marijuana smoke. Newsom also stressed that businesses that fail to follow these safeguards will not be viewed favorably.

The marijuana café law might be the only reprieve for California’s cannabis industry for the time being. The governor’s proposed $291 billion budget for FY 2024–2025 doesn’t include any cuts to the fees or taxes imposed on cannabis businesses.

Just a day earlier, Newsom vetoed a bill, AB 1111, that sought to allow small cannabis producers to sell their products directly to users, citing concerns about its wide scope. Further, he stated that the measure’s eligibility criteria, which included most licensed cannabis growers, could potentially strain the state’s cannabis control department’s regulatory efforts and disrupt the existing retail licensing structure.

The veto has been met with disappointment from advocates within the cannabis industry, particularly those representing small growers. The Origins Council, which represents around 800 producers in the Emerald Triangle, voiced its frustration, noting that small businesses are essential to the sustainability and equity of California’s cannabis market.

The bill, had it been signed into law, would have permitted small farmers to sell up to $175,000 worth of cannabis products at approved events, starting in January 2026.

Over the past few weeks, marijuana industry groups and advocates, such as the Origins Council, Equity Trade Network and Supernova Women, pushed hard for Newsom’s approval through various campaigns.

Despite the veto, Newsom noted that he was open to considering a revised version of the bill next year that would be more narrowly focused. He underlined that future legislation should address the major issues that the cannabis sector is currently facing, such as increased access to legal cannabis products and competition from unregulated sources.

This authorization of cannabis cafes in California is likely to be followed by marijuana companies, including SNDL Inc. (NASDAQ: SNDL), because it could usher in a new dynamic within legal marijuana markets in different jurisdictions. This is because when California leads the way, other jurisdictions often take a leaf from what has worked in the Golden State.

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420 with CNW — Arkansas Disqualifies Medical Cannabis Amendment for November Poll

John Thurston, Arkansas secretary of state, has rejected a proposed amendment aimed at broadening access to medical cannabis. Thurston announced on Aug. 31, 2024, that the group advocating for the reform, Arkansans for Patient Access, had not gathered enough valid signatures to qualify for inclusion on the ballot.

The organization had been given an additional 30 days to collect more signatures but ultimately fell short of the required 90,074 valid signatures. According to Thurston, only 10,521 of the signatures collected throughout the extended period were verified as legitimate. When added to the previously accepted signatures, the total reached 88,040, falling short of the required threshold.

Issue 3, if approved, would have increased the list of medical ailments that can be treated with medical cannabis. Additionally, it would have simplified the licensing process for medical cannabis patients and allowed more healthcare providers to prescribe cannabis.

In response to Thurston’s announcement, the Arkansans for Patient Access released a statement expressing its dissatisfaction and plans to pursue legal action against the office of the Secretary of State. Officials from the organization argue that they submitted more than 150,000 signatures from all Arkansas counties, showcasing strong public backing for the amendment.

The group also claims that the exclusion of approximately 20,000 signatures gathered during the extended period was the result of an unfair, last-minute procedural change that undermines the democratic process.

The main point of contention is a particular requirement that the amendment’s sponsor sign the canvasser registration forms instead of a representative of the business that employs canvassers. This same issue also prevented another proposed change, related to abortion rights, from moving forward in the current election cycle.

Bill Paschall, a spokesperson for Arkansans for Patient Access, argued that the duty of filing canvasser registration documents can be delegated and cited a similar legal stance taken in a previous casino-related case.

While Issue 3 will still appear on this year’s November ballot, any votes cast for or against it will not be counted unless there is a legal resolution.

The conservative Family Council Action Committee hinted in a statement that there will be further litigation over the change. Jerry Cox, executive director of the committee, suggested that those supporting the amendment, which consists of major cannabis businesses in Arkansas and have invested nearly $2 million, would likely appeal to the state’s supreme court to overturn Thurston’s decision.

If this matter goes to the state’s highest court, it could attract the attention of a variety of industry and allied actors such as Innovative Industrial Properties Inc. (NYSE: IIPR) since the expansion of the medical cannabis program could bring full legalization one step closer in Arkansas. Full cannabis legalization has been seen to create broad economic opportunities for different industries and verticals.

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CannabisNewsBreaks – Software Effective Solutions Corp. (d/b/a MedCana) (SFWJ) Releases Report on Series of Acquisitions, Multiple Cannabis Licenses

Software Effective Solutions Corp. (d/b/a MedCana) (OTC: SFWJ), a leading global infrastructure holding company focused on the pharmaceutical-grade cannabis industry, is reporting on recent acquisitions and cannabis licenses associated with the acquisitions. According to the announcement, the new acquisitions and licenses, which will add $1.6 million to company assets for the third quarter, are designed to bolster the company’s cannabis portfolio globally and solidify its position as a leading force in the cannabis sector. According to the announcement, the licenses include seven produce, process and sell CBD licenses; seven produce, process and sell THC licenses; seven fabrication of products containing cannabis licenses; and two genetics licenses.

“The acquisitions we have made put Medcana in a position to succeed and ensure profitably,” said MedCana CEO Gabriel Diaz in the press release.

To view the full press release, visit https://cnw.fm/GDGLg

About Software Effective Solutions

Software Effective Solutions/MedCana is a holding company focused on developing companies in the agricultural technology and the cannabis industries. As MedCana moves forward with its expansion plans, the company remains committed to delivering on its promise of building a solid foundation for future growth of its holdings. For more information, visit the company’s website at www.MedCana.net.

NOTE TO INVESTORS: The latest news and updates relating to SWISF are available in the company’s newsroom at https://cnw.fm/SFWJ

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CannabisNewsWire (“CNW”) is a specialized communications platform with a focus on cannabis news and the cannabis sector. It is one of 75+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled recognition and brand awareness. CNW is where breaking news, insightful content and actionable information converge.

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420 with CNW — Five Highlights from US NASEM Report on Marijuana

Cannabis legalization has made significant progress in the United States, with more than one-half of the states allowing its use for medical or recreational purposes, or both. However, despite these developments, cannabis is still illegal at the federal level.

A recent report from the National Academies of Sciences, Engineering and Medicine (NASEM) highlights the growing divide between federal and state laws, which creates inconsistent policies and could pose risks to public health. Initially, state regulations focused on the business side of cannabis, such as revenue and sales, overlooking public health.

This has led to a situation where policymakers are now scrambling to catch up. The report stresses the importance of federal guidance and consistent national standards to regulate the quality and potency of cannabis, ensuring consumer safety.

Below are five key takeaways from the report:

Cannabis use surpasses alcohol consumption

As per the National Survey on Drug Use and Health, more American adults reported using cannabis nearly every day in 2022 than alcohol, which was the first time marijuana overtook alcohol in terms of frequent use.

During the past 30 years, the number of regular marijuana users has grown significantly, from fewer than a million people in 1992 to almost 18 million in 2022. As cannabis becomes legal in more states, it is easier for people to obtain, with about two-thirds of adults saying the substance is fairly easy to get.

Additionally, the cost of cannabis has decreased, particularly in terms of the cost per unit of THC, the compound responsible for cannabis’ psychoactive effects.

The potency of cannabis products is often undisclosed

Cannabis has progressively grown more THC-concentrated over time. Although smoking dried marijuana flower remains common, there’s been a surge in the popularity of vape oils, edibles and other products.

While some states limit THC levels in certain cannabis products, such as edibles, many other cannabis products remain unregulated. THC concentrations in products such as shatter, wax and dabs can range from 60% to 90%, according to Dr. Yasmin Hurd, head of the Addiction Institute at Mount Sinai.

These high-potency products increase the risk of overconsumption, contributing to more hospital visits and accidents.

Psychoactive hemp products are available in states where cannabis is illegal

Despite marijuana being classified as a schedule I drug under federal law, the 2018 Farm Bill legalized certain hemp-derived products. This has led to an influx of products containing substances, including delta-8 THC and CBD, some of which can still have psychoactive effects.

These hemp-based products are often sold even in states where cannabis remains illegal, though they are largely unregulated. Health officials have raised concerns about the safety of these products, and the report recommends closing this regulatory loophole.

Cannabis research faces significant obstacles

Studying cannabis remains a challenge due to its classification as a schedule I drug, which places strict limitations on researchers. These restrictions make it difficult to conduct studies on the health effects of cannabis.

Even agencies such as the White House Office of National Drug Policy are not permitted to research the impacts of cannabis legalization. The report recommends that Congress remove these barriers and support more extensive research.

Marijuana health risks are often overlooked amid growing public support

Many people view cannabis as less harmful since its legalization, yet awareness of its potential risks remains low. THC has been linked to increased risks of marijuana use disorder, psychosis and suicidal thoughts, especially when consumed in higher doses.

With pro-marijuana advertising becoming more widespread, especially among young adults, there is growing concern about the long-term effects.

The report advocates for public health initiatives to educate the public on the risks, especially targeting vulnerable groups, including children, pregnant women and seniors. Moreover, it calls for better training for marijuana retail staff to provide accurate information to consumers.

This report is likely to draw the interest of cannabis companies such as Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) because it contains numerous insights that can offer glimpses into the discussion points likely to shape future federal policy on marijuana.

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420 with CNW — Officials in Ukraine Approve Medical Marijuana Qualifying Conditions

The government of Ukraine recently approved a list of medical conditions that qualify for medical marijuana following the enactment of the country’s marijuana legislation by President Volodymyr Zelensky. The Ministry of Health shared a list of roughly 20 medical conditions eligible for marijuana treatment, noting that more conditions could be included later if medically approved.

The current list covers a variety of health issues, including neuropathy, multiple sclerosis, shingles, cerebral palsy, chemotherapy-related complications, childhood epilepsy and Parkinson’s disease.

While Zelensky and other officials have said access to medical marijuana can help soldiers address mental and physical wounds incurred during the nation’s ongoing war with Russia, post-traumatic stress disorder (PTSD) is currently not a qualifying medical condition.

The Ministry of Health also clarified the guidelines for using marijuana-based medicines, emphasizing the need for strict state control. Patients are advised to stop treatment if they don’t see therapeutic effects within one to three months or if they experience serious side effects, including mental-health issues.

The country has begun importing cannabis products following the decision to move marijuana from list 1 to list 2 of Ukraine’s drug classification system. This shift allows cannabis to be prescribed for medical use.

The legislation was initially approved last year but faced opposition when the Batkivshchyna party attempted to block it by introducing a resolution to repeal the bill. That resolution was ultimately rejected in January this year, clearing the way for the law to take effect. Opponents of the measure also tried to stop it by submitting hundreds of amendments, described by critics as “spam,” to slow the process. Despite these efforts, 248 votes were cast in favor of the bill.

The responsibility for regulating marijuana cultivation and processing will fall to Ukraine’s Ministry of Agrarian Policy. The State Agency on Medicines and the National Police will oversee the distribution of cannabis for medical use and ensure compliance with the law.

Zelensky has been vocal in his support for medical cannabis. In an address to parliament last year, he urged lawmakers to adopt best practices from around the world to help alleviate the pain and suffering of Ukrainians, especially given the country’s ongoing war. He stressed the need to legalize marijuana-based medicines for persons in need while ensuring that production is properly regulated.

The current reform is opposed to that of Russia, Ukraine’s longstanding foe. Russia has always opposed marijuana reform on a national and international level and has expressed disapproval of nations such as Canada that have legalized the drug.

The medical marijuana program is taking shape in Ukraine, and it might be an industry that companies such as Aurora Cannabis Corp. (NASDAQ: ACB) (TSX: ACB) could keep an eye on since it could present an international market that they could venture into.

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420 with CNW — Does Florida Cannabis Ballot Measure Stand Chance of Passing?

Former President Donald Trump recently expressed support for Amendment 3, a ballot initiative scheduled for Nov. 5, 2024, that would legalize recreational cannabis in Florida. This unexpected endorsement has added a new twist to the ongoing legalization efforts in the state.

Proponents of the measure are hoping that Trump’s backing will help sway the 15% of undecided voters to vote in favor of the legislation. With just over a month before the election, the fate of Amendment 3 is still uncertain as polls show the decision could go either way. To pass, the measure needs at least 60% of the vote; thus, every vote is crucial.

A recent Fox News poll showed 66% of voters in the state support the initiative, while another poll by Florida Atlantic University showed only 56% planned to vote yes. While polls show mixed results, the financial backing on both sides of the debate reveals a large gap.

Smart and Safe Florida, a political action committee (PAC) led by Trulieve and supporting Amendment 3, has managed to raise more than $100 million as of Sept. 20. Meanwhile, the opposition, including two anti-marijuana PACs — Keep Florida Clean and Florida Freedom Fund, aligned with Governor Ron DeSantis — has raised about $20 million.

Big donors on both sides are actively contributing to their respective causes. Trulieve has donated at least $87 million in support of the measure. On the opposing side, Ken Griffin, founder of Citadel Hedge Fund, has donated $12 million to Keep Florida Clean, with another $7 million expected.

The situation becomes even more complicated with the state’s hemp industry executives opposing the measure and pledging $5 million to fight it. This follows Governor Ron DeSantis’ veto of SB 1698 on June 7, 2024, which aimed to ban intoxicating cannabinoids derived from hemp, a move that could have severely impacted the hemp sector.

Florida’s medical marijuana market was largely dominated by multistate operators (MSOs). Verano Holdings, Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF), Surterra and Ayr Wellness control 61.4% of the 603 medical cannabis dispensaries in the state, while Trulieve owns 21% of them.

Approximately 4% of Florida’s population is registered as a patient using medical marijuana, making the state’s medical cannabis market substantial.

If Amendment 3 passes, many of the current medical cannabis operators will likely transition to the recreational market. The law would take effect six months later, on May 5, 2025. However, given DeSantis’ opposition and the GOP-controlled legislature, there’s potential for political maneuvering that could delay the process well beyond that date.

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420 with CNW — Kentucky Officials Prepare to Hold Medical Cannabis License Lottery

Kentucky will begin its lottery for medical cannabis business licenses next month, marking a key milestone in launching the state’s medical marijuana program. There has been an overwhelming response to the program, with Kentucky officials receiving close to 5,000 applications for business licenses before the Aug. 31, 2024, deadline.

Most of these applications, around 4,096, came from individuals and groups wanting to open dispensaries. However, only 48 of those dispensaries will be granted licenses. Governor Andy Beshear commented on the significant interest, stating, “The results speak for themselves. There is amazing, even overwhelming, interest, particularly from Kentuckians. This demonstrates that the program will achieve its goals.”

Beshear also noted that the state is now processing the applications, and the license lottery will be divided based on different business categories. The first licenses to be awarded next month will go to cultivators and processors. This will help ensure the program remains on track for its planned launch in January 2025.

There is a strict deadline for license issuance, and the state is trying to issue the licenses as soon as feasible. With the lottery scheduled for next month and January fast approaching, there is growing concern about whether there will be enough medical cannabis available by the program’s start date.

Beshear acknowledged this concern and assured that a contingency plan is underway. He stated that an executive order would be put in place if the state foresees any issues with product availability. This would allow patients to obtain medical cannabis from other states, such as Ohio, under certain specific conditions.

The state’s medical cannabis program will be relatively small in scale, with only patients with specific qualifying medical conditions eligible to purchase medical cannabis. This means the demand for the product will be lower compared to states that have fully legalized marijuana for both medical and recreational use.

Medical cannabis in Kentucky was passed through Senate Bill 47, which Beshear signed into law in 2023.The law permits patients with qualifying conditions to use medical marijuana; however, smoking marijuana will remain prohibited. Instead, patients will have the option to vape dried flower, similar to Ohio’s medical cannabis program.

The law also sets limits on THC content. Cannabis flower will have a cap of 35% THC, while tinctures, edibles and oils will be limited to 10 milligrams per serving. Concentrates will be limited to 70% THC. Home growing of cannabis is prohibited.

Established companies in other well-established cannabis markets, such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF), will be hoping that the medical cannabis program launch in Kentucky goes according to plan so that qualifying patients can readily access the products they need.

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420 with CNW — IRS to Keep Applying 280E Until Marijuana Reclassification Completed

The U.S. Internal Revenue Service (IRS) intends to continue seeking tax payments from cannabis businesses that have taken deductions in anticipation of possible federal changes, according to an attorney with the agency. Even if marijuana is rescheduled federally, the IRS could theoretically seize assets from marijuana companies that fail to meet their tax obligations.

Luke Ortner, IRS senior counsel, spoke about the possible effects of rescheduling marijuana from schedule 1 to 3 under the Controlled Substances Act (CSA) in a recent discussion at the American Institute of Certified Public Accountants (AICPA) marijuana conference in Denver.

The change, if enacted, would allow state-approved marijuana businesses to take advantage of federal tax deductions, which they have been unable to do under IRS code 280E.

Although the rulemaking process is still ongoing, some larger cannabis companies have already started to claim deductions. For instance, cannabis giant Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) revealed in January that it had received $113 million in refunds for 280E. Ascend Wellness and TerrAscend have also stated that they expect comparable reimbursements.

The IRS noted that the 280E rule remains in effect until a final rule is implemented, a point Ortner reiterated during the conference. He further emphasized that even if marijuana is rescheduled, the IRS would continue to enforce 280E for past tax years, meaning cannabis companies would still be liable for previous unpaid taxes.

Several businesses and industry participants have presented legal defenses for their 280E tax deduction claims. They have argued, for example, that the policy shouldn’t apply in cases where cannabis-related activities are only conducted within a state.

Ortner stated that there are currently pending legal challenges that may affect the IRS’s future approach to these problems. For the time being, however, the IRS position remains unaltered, and it will work to recoup any payments made in violation of 280E. Ortner assured the accountants that those working with state-licensed marijuana businesses would not face penalties for helping the organizations file tax returns.

Ortner also brought up another possible effect of reclassification, despite the optimism of many in the cannabis industry that rescheduling will eventually treat their businesses like other traditional ones, at least in terms of tax policy. The IRS might be better equipped to enforce tax collection against businesses that don’t fulfill their commitments if marijuana is placed on schedule 3.

Currently, with cannabis classified as a schedule 1 drug, the IRS has largely deferred enforcement to the U.S. Drug Enforcement Administration (DEA) and has not aggressively pursued companies that are not compliant with tax laws. However, Ortner noted that this could change with reclassification.

However, rescheduling is not assured. Before making any judgments, the DEA is anticipated to hold a hearing in December 2024 to obtain additional feedback regarding the suggested reform.

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