4/30 is the new 4/20.
We’ve been predicting an April announcement, to allow for plenty of time for the process to be completed before the election, and the reschedule is right on schedule.
This is fantastic news, and there have been lots of long-awaited celebrations across the industry.
Now that we know that 2024 is likely the year, we’ve got to get into the weeds to understand the exact timing of the reschedule, as well as when 280E will go away – and an estimated two billion dollars will come pouring back into the industry’s balance sheets.
For more on the reschedule timing, check out my Aaron Smith interview.
There are also ripple effects that we will see across the country. For example, Texas has trigger laws that match federal scheduling as long as the Department of State Health Services in Texas doesn’t intercede within 30 days. This could open the door to expand the current medical program or develop a recreation use program in the next legislative session – and create one of the largest cannabis markets in the country.
One other possible benefit: Chances are increasing that SAFER banking will become a reality. This won’t be automatic, and just because the bill passes, it doesn’t mean every financial institution will open its doors; but it’s a step in the right direction.
If there’s one question I’ve been getting from clients and industry experts it’s: What do I do now, financially?
There are two major question marks that remain: When exactly will the reschedule happen and, once it does, when does 280E go away, in the 2024 or 2025 tax year? Until those questions are answered, we continue to recommend that businesses keep their tax reserve at the pre-reschedule level, separating it out into a separate bank account. Best case scenario, you end up with extra dollars next year. Worst case, you are able to handle a massive tax bill.
Note: With all the news about companies submitting amended tax returns, keep in mind the reschedule doesn’t impact this. Investing in a tax attorney to secure a refund could be a six-figure investment. Even if you were successful, you’d want to keep your refund in an interest-bearing account while you await a final decision.
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