420 with CNW — The Business and Legal Impact of Inconsistent Marijuana Testing Rules

Marijuana businesses operating legally across different states face a complicated reality when it comes to product testing. Without federal regulations, states have built their own rules around lab licensing, testing requirements, sampling methods, and even how to handle contaminated products.

This patchwork approach creates major headaches for companies, especially those working in multiple states, leading to inconsistent results, unexpected recalls, and financial risks.

In every legal state, cannabis must pass quality testing before reaching consumers. Labs need to be approved at the state level, but the way states license and accredit labs varies widely. Many states require labs to meet ISO standards for accuracy and reliability, while others have created alternative accreditation systems.

Since no nationwide testing methods exist, labs often develop their own procedures to meet local regulations, making it difficult to compare results across different regions.

One major problem is the inconsistency in what marijuana products must be tested for. Microbial contamination is a good example—some states demand zero tolerance for specific bacteria or mold, while others allow small amounts.

Pesticide testing rules also differ. Some states enforce strict bans on any pesticide residue, while others set thresholds, meaning trace amounts might still pass. Heavy metal testing is another area with differences. While most states test for mercury, arsenic, lead, and cadmium, some also require screening for additional metals like nickel and chromium.

THC potency testing is one of the few areas with broad agreement: almost all states require labs to measure THC levels for labeling. Still, states differ on how they calculate and define “Total THC” and whether they require testing for other cannabinoids like CBG or CBN.

Testing also changes depending on the product type. Marijuana flower usually faces the broadest testing requirements, while concentrates and edibles may have modified standards. For instance, concentrates often undergo solvent testing to ensure no harmful extraction chemicals are left behind. However, microbial testing may be relaxed for certain concentrate products since the extraction process can eliminate some microbes.

When it comes to topicals, edibles, and beverages, testing standards diverge even more. Some states believe that if the extract used in an edible passed all testing, the finished product doesn’t need to be retested. Others insist that the final product must be checked again.

Sampling procedures add another layer of inconsistency. Some states allow licensees to collect their own samples, while others require labs or neutral parties to do it to prevent tampering. Sampling sizes also vary: some states base it on a percentage of the batch, others on weight guidelines. These differences affect the reliability of test results and encourage practices like “lab shopping,” where companies look for labs that might deliver more favorable outcomes.

When a batch fails testing, the consequences depend heavily on local rules. Some states require immediate destruction, especially for serious contamination such as banned pesticides. Others allow remediation efforts, giving businesses a chance to fix and retest their products.

For marijuana operators trying to stay compliant, this fragmented system isn’t just a paperwork hassle—it can cause real financial damage. A failed batch, product recall, or lawsuit over testing can cost companies millions. Even when businesses do everything by the book, they might get caught up in recalls caused by lab errors or inconsistent standards.

For instance, Michigan regulators recalled all marijuana products tested over three months by a major laboratory in 2021. More than 400 dispensaries were impacted, and about $229 million worth of products were pulled from shelves.

As the industry evolves, businesses, regulators, and labs need a more unified system with shared testing standards and methods. Standardization would protect consumers, provide more stability for companies, and create a safer, more trustworthy industry overall.

For companies like Trulieve Cannabis Corp. (CBoe CA: TRUL) (OTCQX: TCNNF) that focus on making and selling medical marijuana products, uniform cannabis testing rules and practices are very important since lives can be impacted adversely if this crucial testing phase isn’t uniformly undertaken.

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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 — Dutch Marijuana Growers Applaud Decision to Expand Regulated Sales Experiment

The Dutch government has expanded a state-backed cannabis program to allow legal sales, even though growing it remains against the law in most cases. As of now, cannabis stores in ten cities can offer weed sourced from ten officially licensed growers.

For decades, selling small amounts of cannabis in Dutch coffee shops has been tolerated, but the actual cultivation was still illegal. This setup created a legal loophole where you could sell cannabis but not legally produce it. Rick Bakker, a commercial director of one of the approved growers, Hollandse Hoogtes, called it an overdue fix to a confusing situation.

Roughly 80 coffeeshops are now involved in the trial, which is designed to bring more consistency and safety to the cannabis supply chain. One of the main aims is to address issues tied to illegal cultivation, such as crime and poor quality control.

Hollandse Hoogtes, located close to the German border in Bemmel, produces about 440 pounds of cannabis each week. The facility resembles a standard greenhouse operation but stands out for its strict quality standards. Head grower Benjamin Selma, who previously worked in California’s marijuana industry, says every batch is tested for harmful microbes, heavy metals, cannabinoids, and terpenes. No pesticides are used, and the growing environment is closely monitored.

The facility also uses solar power and eco-friendly packaging as part of its sustainability efforts.

Although the Netherlands was one of the first countries to adopt a tolerant stance on cannabis back in the 1970s, the nation has become stricter in recent years. In places like Amsterdam, coffeeshops have been closing, and public smoking has been restricted in certain areas.

Supporters of the trial believe it’s a key step toward a safer, more transparent marijuana industry. Mayor Paul Depla of Breda highlighted the importance of cooperation between authorities, growers, and shop owners in making the system work.

The plan was first proposed in 2017 after a compromise between conservative and progressive political parties. The government has set a four-year period for the trial during which researchers will monitor its impact on public safety, health, and organized crime. Results from the trial will guide future decisions on national cannabis policy.

For growers like Selma, the shift to legal work is a relief. After years of operating under risky conditions, he said it feels almost unreal to finally produce cannabis without fear of legal consequences.

The participating cities include Zaanstad, Almere, Breda, Arnhem, Groningen, Tilburg, Heerlen, Hellevoetsluis, Nijmegen, and Maastricht.

As the system proves its efficacy, it could trigger opportunities for international players like Trulieve Cannabis Corp. (CNX: TRUL) (OTCQX: TCNNF) interested in expanding their global footprint.

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420 with CNW — Coalition Government Talks in Germany Could Be Complicated by Marijuana Policy

Germany’s coalition negotiations could become tense as the Christian Democrats (CDU) and Social Democrats (SPD) clash over the country’s marijuana law. The SPD, which championed the legislation last year, considers it a key achievement, while the CDU has always opposed legalization.

Following initial post-election discussions, CDU leader Friedrich Merz expressed optimism about forming a coalition government with SPD, describing the talks as productive. However, this cooperative atmosphere may not last.

The SPD-led coalition, which included the Greens and Free Democrats (FDP), pushed for the legislation in April last year, bringing Germany in line with the Netherlands, Portugal, Spain, Malta, and Belgium in decriminalizing marijuana.

Merz previously stated his party’s opposition to the law, telling Tagesschau before the election that the CDU intended to “fix” the law. Their manifesto went further, labeling legalization a failure and pledging to remove it.

The SPD, on the other hand, is still committed to cannabis reform and even called for further changes aligning with European standards.

Ahead of coalition discussions, CDU health policy representative Tino Sorge criticized the law as a “dangerous mistake,” arguing that it should be repealed. However, he acknowledged that coalition talks would ultimately determine the outcome. Given the differing positions and economic factors at play, a compromise appears likely.

The industry remains hopeful that a complete rollback is unlikely. Bloomwell Group CEO Niklas Kouparanis expressed confidence that major changes wouldn’t disrupt Germany’s medical marijuana market. He argued that reclassifying marijuana as a narcotic would be a complex and time-consuming process. Instead, he expects adjustments such as stricter regulations on nonprofit marijuana clubs and home cultivation limits.

From an industry perspective, the SPD’s legalization effort has positioned Germany as a key player in the medical marijuana sector. Any reversal could break an election promise and expose the government to legal challenges.

By November last year, nearly 400 marijuana social clubs had applied for licenses, though only a fraction had received approval. Kouparanis warned that revoking the law could lead to legal claims from already licensed clubs seeking compensation.

Beyond legal concerns, the economic impact is substantial. Sales of cannabis-based medicines covered by health insurance have doubled in three years, with further growth expected. Imports of medical marijuana quadrupled in 2024, with shipments rising to 31.7 tons over the year.

The CDU’s economic priorities might influence future policy. A CDU-led government could take a state-controlled but economically sensible approach to healthcare. Given the SPD’s weaker position in coalition talks, their ability to protect cannabis legislation remains uncertain.

Major North American marijuana companies like Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) are likely to keep tabs on the unfolding situation in Germany in order to assess whether potential market opportunities emerge or the new government scuttles the progress made in reforming the country’s drug laws.

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420 with CNW — New Florida Bill Wants Patients with MMJ Cards to Grow Cannabis at Home

While the push to legalize recreational cannabis in Florida did not succeed in the November election, lawmakers are now focusing on expanding access to medical marijuana. A proposed piece of legislation, Senate Bill 546, aims to give medical cannabis patients the ability to cultivate their own marijuana plants at home.

If passed, the measure would allow registered patients to grow up to two plants for personal medical use.

For many patients relying on medical cannabis, accessibility remains a challenge, especially in remote areas of Florida. Some people live hours away from the nearest dispensary, making it difficult to obtain their medication conveniently. While delivery services are available, they do not offer the immediate access that a physical store would provide.

Paula Savchenko, a marijuana law attorney pointed out that this delay can be frustrating for patients who need their medication promptly.

The push for SB 546 is gaining traction among patients who see home cultivation as a practical solution. Under the proposed legislation, individuals interested in growing cannabis would be required to obtain a cultivation certificate. This process would involve registering each plant and undergoing inspections, among other stipulations.

“The response to this bill among existing medical cannabis treatment centers has been mixed. Some cannabis businesses support the idea, while others have reservations. However, within the industry as a whole, there is a strong belief that patients should have the right to cultivate their own medicine,” Savchenko explained.

A poll conducted last year for Royal Queen Seeds, a cannabis seed company based in Barcelona, found that 81% of marijuana users in the U.S. believe individuals should have the right to grow cannabis at home. Additionally, 26% of users reported having grown plants in their residence, while 21% of those who have not tried it expressed an interest in doing so.

Based in Fort Lauderdale, Savchenko has helped several dispensary businesses navigate the licensing and regulatory process required to operate legally. She noted that in some cases, businesses have waited over a year for approval, only to receive a denial that then requires an appeal, prolonging the process even further. This lengthy approval period is another reason why some patients and advocates see home cultivation as a beneficial alternative.

“Since the bill only permits two plants per cannabis patient, it is unlikely that this will entirely replace dispensary purchases. Patients will still need to visit stores for additional supply,” Savchenko added.

The measure has only been introduced and must go through further steps before becoming law. The next phase involves assigning the bill to a legislative committee for an initial reading. A specific date for this has yet to be determined.

It remains to be seen what major medical marijuana companies like Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) think about this latest effort to reform the medical marijuana landscape in Florida.

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420 with CNW — Activists in Florida File New Initiative to Legalize Recreational Marijuana

Marijuana advocates in Florida have submitted a fresh proposal aimed at legalizing recreational cannabis. The new measure comes only two months after a similar one failed to secure the required supermajority vote during the November election. Florida residents will have the opportunity to vote on the legalization of recreational cannabis in 2026 if the measure is approved.

Smart and Safe Florida, the group behind the measure, officially submitted it to the state Elections’ Division on Tuesday. The initiative would legalize recreational cannabis use for individuals 21 years of age or older while establishing regulations for the cultivation, sale, and distribution of marijuana. Under the proposed rules, adults would be allowed to possess a maximum of five grams of cannabis concentrates and two ounces of marijuana.

The revised initiative introduces significant changes compared to last year’s ballot measure to address criticisms that contributed to its failure. One key concern, voiced by Republican Governor Ron DeSantis, was that the previous measure would have limited the state legislature’s ability to regulate where marijuana could be consumed.

To address this, the updated proposal explicitly bans vaping and smoking cannabis in public spaces. Additionally, it includes provisions to prevent marijuana packaging and advertising from appealing to children.

Another notable addition to the new initiative is a clause allowing the legislature to authorize adults to grow cannabis at home for personal use under reasonable regulations. This addresses a criticism of the previous proposal, which lacked provisions for home cultivation—a feature many marijuana reform advocates had hoped to see.

The previous attempt to legalize cannabis, Amendment 3, was backed by about 56% of voters in the general election held in November. But it didn’t reach the 60% threshold that Florida law requires. The unsuccessful measure was heavily backed by Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), the largest supplier of medical cannabis in the state.

Similar to Amendment 3, the latest proposal would permit Florida’s existing medical marijuana businesses to expand into the recreational market, allowing sales to individuals 21 years of age and older. It also requires issuing new licenses to businesses exclusively focused on recreational cannabis.

To qualify for the ballot, Smart and Safe Florida must collect approximately 900,000 valid voters’ signatures. Should the necessary signatures be obtained and the language of the measure be approved by Florida’s Supreme Court, voters will have the opportunity to decide on the proposal in 2026.

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420 with CNW — Marijuana is Widely Available in Texas Despite its Prohibitive Laws

In Texas, getting high has never been easier, despite the state’s reputation for strict policies and socially conservative values. While recreational cannabis remains illegal, Texas boasts over 7,000 marijuana dispensaries—nearly double the number in California. The market has expanded to include 24/7 marijuana delivery services, mobile dispensary trucks, vending machines, and even mail-order options.

The contradiction arises from the state legislature, which has consistently opposed legalizing recreational cannabis. Yet, due to a rapidly growing and loosely regulated hemp market, Texas has unintentionally earned the nickname “the THC Republic.”

It began when Congress passed Farm Bill 2018, which legalized hemp by classifying it separately from cannabis. While cannabis contains high levels of THC, hemp has significantly lower levels. In 2019, Texas followed suit by allowing farmers to grow hemp for uses like textiles, paper, and clothing. Legislators believed they were steering clear of legalizing cannabis. However, a loophole in the hemp law enabled the sale of potent cannabis products.

Texas isn’t alone—eleven other states, primarily in the South, have experienced similar unintended consequences after passing hemp-friendly legislation. However, with its large cities and rapidly growing population, Texas has become the center of this trend. Although medical cannabis is legal in Texas, it’s tightly regulated, expensive, and limited to certain conditions like multiple sclerosis and cancer.

The largely unregulated hemp market has grown far beyond medical cannabis, creating significant challenges. Without age restrictions, some shops sell hemp products to underage buyers, including students after school hours. Moreover, licensed medical cannabis providers face difficulty competing with the hemp industry, which operates with fewer restrictions and a dedicated customer base.

Interestingly, the hemp market has also led to a dramatic decrease in the cannabis black market. Seizures of illegal cannabis along the Southwest border decreased by 72% between 2021 and 2023. Consumers now prefer regulated cannabis over the harsher, cartel-supplied “brickweed.”

In places like El Paso, residents who previously relied on dealers from Juarez, Mexico, can now cross into nearby New Mexico, where recreational cannabis has been legal since 2021, to shop at upscale dispensaries.

Psychoactive hemp will be a high agenda item when the Texas legislature meets for its biennial session. While the marijuana industry hopes for more mild rules, Gov. Dan Patrick has pledged to advocate for a total prohibition of THC products. If successful, it could mark the end of Texas’ thriving THC marketplace.

The broader marijuana industry, including Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), will be following the developments in Texas to see how the legitimate needs of residents who wish to consume THC products will be addressed by the conservative lawmakers in the state.

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420 with CNW — Survey Suggests Most American Teens Are Shunning Alcohol, Tobacco, and Marijuana

Drug use in teenagers has not returned to pre-pandemic levels, according to findings from a recent survey.

This year, nearly two-thirds of high school seniors reported abstaining from e-cigarettes, cannabis, alcohol, or cigarettes over the past month. This marks the highest abstinence rate since the annual nationwide survey began tracking this data in 2017.

Additionally, 80% of students in grade 10 said they had not used any of these substances recently, setting another record. Ninety percent of those in grade 8 said they did not use any of the substances, which is the same percentage as in the prior study.

The only notable rise in substance use was in nicotine pouch consumption, with approximately six percent of high school seniors using them in the past year, up from about three percent in 2023. However, it’s uncertain if this indicates the start of a larger trend. Richard Miech, the lead researcher for the survey conducted by the University of Michigan, commented, “It’s difficult to determine whether this is the beginning of a broader issue or not.”

The Monitoring the Future, funded by the federal government, has been collecting data since 1975. This year’s results are based on responses from roughly 24,000 students in grades 12, 10, and 8 across the U.S.

During the pandemic, schools shifted to remote learning, and gatherings like parties were discouraged. With teens staying home under parental oversight, experimentation with substances dropped significantly. Experts suggest that peer pressure, often experienced in group settings, plays a key role in initiating substance use.

When restrictions were lifted, many anticipated a partial return to previous levels of use. However, even before COVID-19, rates of drinking, smoking, and the use of certain drugs had been declining. Analysts attributed this trend to teenagers spending more time at home and connecting with peers through smartphones rather than in social gatherings, where substance use might occur.

Interestingly, cannabis and vaping, which had been increasing before the pandemic, also saw declines during this period—declines that have persisted since. Some analysts speculate that the lockdowns disrupted a cycle where older students introduce substances to younger ones. Teens who were in grade 9 during the pandemic may have missed opportunities to experiment, which also limited their influence on younger peers, according to Miech.

Mental health might also have contributed. Reports of anxiety and depression surged among teens during the pandemic. While depression can sometimes lead to substance use, some anxious teens avoid drugs, fearing their effects.

This survey dampens prohibitionists’ argument that legalizing marijuana and licensing companies like Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) would result in a spike in underage users of this substance.

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420 with CNW — Florida Measure to Legalize Recreational Marijuana Fails to Garner Supermajority

A ballot initiative to legalize marijuana for recreational use in Florida failed Tuesday, receiving 55.9% of the vote but falling short of the 60% threshold needed to amend the constitution.

The initiative, known as Amendment 3, sought to allow adults over 21 to purchase cannabis for adult use from already-existing medicinal dispensaries, with the potential to extend to other retailers if the Legislature approved.

The primary financial backing for Amendment 3 came from Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), Florida’s leading medical cannabis company, which contributed approximately $145 million to the campaign. This made up the great majority of the campaign’s $153 million budget as of October.

However, opposition was strong, with Governor Ron DeSantis and the Florida Republican Party voicing concerns. DeSantis argued that legalization would have a detrimental effect on people’s quality of life, including worries about possible marijuana-related odors.

In South Dakota and North Dakota, similar efforts to legalize recreational cannabis were also underway but did not gain enough support. The two states have now voted on recreational cannabis measures three times, with each attempt failing to pass.

Meanwhile, Nebraska voters took a different direction, approving two measures—Initiative Measures 438 and 437—to permit and regulate medical cannabis. Measure 437 passed with 70.7% support and allows individuals with a healthcare provider’s recommendation to use and possess up to five ounces of medical cannabis.

Measure 438, garnering 66.9% support, establishes a regulatory framework for the medical cannabis industry in Nebraska, including the creation of the Nebraska Medical Marijuana Commission. The measure authorizes registered private entities to manufacture, distribute, and dispense medical cannabis.

As of the time of the 2024 elections, recreational marijuana had been legalized in 24 states and D.C., covering about 53% of the U.S. population. Additionally, 38 states and D.C. had laws permitting medical cannabis use. Despite these state-level policies, cannabis remains illegal at the federal level, where possession and sales are still subject to legal penalties, including fines and prison time.

Other states had a range of measures on their ballots that went beyond cannabis legislation. Some states passed amendments to prohibit non-U.S. citizens from voting, and Arizona passed a measure allowing local law enforcement to implement immigration laws. Various other proposals addressed taxes, wages, and educational policies. For example, school choice initiatives were considered but ultimately failed in Nebraska and Kentucky.

Many of the measures were brought to the public through citizen petitions, bypassing state legislatures, while others were introduced by legislators.

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420 with CNW — Benzinga Cannabis Conference Shows How Businesses Are Struggling in the Legal Grey Area

Last week’s Benzinga cannabis conference, held in downtown Chicago, offered a glimpse into an industry that is anxiously awaiting full legal recognition.

The event seemed, at first appearance, to be very similar to most business conferences. There were notably fewer women in the gathering than men, who made up the majority of those in suits. While many participants left with complimentary T-shirts or tote bags, there was no overt smell of cannabis in the venue. However, it was more difficult to locate actual cannabis on-site.

Most of the people present had experience in traditional corporate settings before transitioning into the marijuana space. Many had backgrounds in industries like alcohol, law, or medicine. Surprisingly, several marijuana company CEOs admitted they had never personally tried marijuana until they began working in the industry.

The conference covered a variety of topics, from taxation to lobbying efforts. However, speakers occasionally touched on the reality that thousands of individuals have been imprisoned for participating in the illegal cannabis trade. These individuals, who are often left out of the conversation, would likely never get to attend such events.

In addition to broader legal challenges, the inconsistency of cannabis regulations across different states also poses significant hurdles for the sector.

For instance, designer Dang Nguyen of The Packaging Company shared that he often has to create multiple versions of the same packaging to meet diverse state cannabis requirements. Some states mandate that warning labels cover a significant portion of the package design, while others prohibit the use of bright or attractive colors on packaging.

The complex regulatory environment has even given rise to new industry sectors. Certainty Labs’ creator, Brandy Young, launched her company when recreational marijuana became legal in New York. Her lab specializes in third-party testing, which is required by law to guarantee that marijuana products have proper potency labels and do not contain harmful levels of contaminants like heavy metals or pesticides.

However, Young pointed out that labs face criticism from both within the industry and from consumers. “Regulators place us in a role where we’re seen as policing the industry, but that’s not our purpose,” she explained. On top of that, labs can lose credibility with consumers due to incidents like a recent exposé by the Los Angeles Times, which revealed that some marijuana products contained harmful chemicals that did not show up in lab tests.

For many marijuana businesses struggling to stay afloat, the hope is that federal legalization could bring financial security and stability. However, according to some experts, this could come with its own set of problems, such as higher taxes. Nonetheless, the entire industry, including firms like Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), would appreciate a uniform regulatory structure across the country.

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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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