Expert Panel Discusses Cannabis 280e Rescheduling And Timelines At Benzinga Miami
On Wednesday, a panel of experts at the Benzinga Cannabis Capital Conference discussed the issue of the IRS code 280e, which prohibits the cannabis industry from taking federal deductions.
This limitation prevents cannabis companies from benefiting from key tax deductions in their federal filings.
Descheduling or rescheduling cannabis by the federal government could provide relief from the 280E tax code for cannabis businesses. This could reduce the tax burden by allowing them to take standard deductions, but this process is complex and could take years. Therefore, experts should consider the impact of 280e when evaluating the financial feasibility of cannabis businesses.
Communication, Lobbying And Outreach Strategies To Influence 280e Descheduling Process
Andrew Kline, co-chair, Cannabis Practice at Perkins Coie, noted scheduling is the only way to achieve President Joe Biden’s vision, but a backup plan is necessary because the Food and Drug Administration (FDA) may not handle the scheduling.
Kline explained the backup plan is to schedule marijuana as a class III, IV, or V substance.
According to Kevin Joseph, president of The Joseph Group, Biden’s proposal seems to be the most promising option in terms of time for resolving the issue with 280e. He also noted the administration started the process in October as a political strategy to encourage young people to vote and secure a campaign victory in the spring of 2024.
“We feel fairly confident that the process will play itself out within the next 12 months and at that point, in time we’ll have we think the strongest case for fixing 280e and changing the balance sheet for everybody in the business,” Joseph added.
Adam Goers, senior vice president, Corporate Affairs at Columbia Care Inc CCHWF said Biden went out of his way to ask the FDA to swiftly examine the issue publicly, something that has never been done before.
He emphasized that the industry needs to push to make sure Biden’s administration knows where to go, which requires effective communication and advocacy.
The future of the cannabis industry depends on the decisions made in Washington, D.C., whether through legislation or regulation. Joseph said the divided Congress doesn’t offer many chances for legalizing cannabis federally.
“We think that this regulatory process is the most certain process it’s devoid of a split Congress it really does require more focus and attention from folks,” Joseph said. “This is not a typical FDA process;” it was started for political reasons and will be influenced by politics. The final outcome will be determined by politics.”
Rescheduling 280e And Safe Banking Act: A Winning Combination For Remarkable Outcomes
Rescheduling combined with SAFE Banking Act leads to incredible outcomes, said Goers, who added that they complement each other, as having better payment and banking relationships is excellent, but it’s not enough if 280e isn’t fixed. Even if safe banking regulations are put in place, operating within a good financial system is impossible if 280e is not resolved.
In order to ensure the bill’s success, a discharge petition needs to be filed and the process needs to be followed, explained Joseph, a long-time Washington, D.C. politico. “For a major economic reform like cannabis legalization, these massive measures can take 8 to 10 years, so the fact that we moved the ball so far in two years was really significant,” he noted.
“This is our moment and we need to all be rowing in the same direction and understand that this is the path to reform,” added Kline, who pointed out that the Department of Justice and FDA should let this industry thrive.
“If we reschedule I think it’s going to be central to the states remaining in control until rules can be promulgated at the federal level,” Kline said.
“There is going to be a decision, we think it’s in about 10 months,” Goers added.
The panelists plan to file their paper next week but the next phase requires lobbying efforts and public relations campaigns. It is important to both apply pressure and educate the administration on the issue at hand. This effort requires financial resources, and it’s crucial to allocate the necessary funds.
This article was originally published on Benzinga and appears here with permission.