The Current Landscape of the Cannabis Industry
June 02, 2022
Earlier this month, EisnerAmper’s Eric Altstadter and Hubert Klein were joined by Robert M. DiPisa, co-chair of Cole Schotz’s Cannabis Law Group, for a webinar on new developments in the cannabis business world.
The event, titled High Noon: The Current Landscape of the Cannabis Industry: An Ever-Evolving & Emerging Industry, covered new trends and insights impacting business licensing, changing regulations, and new retail and research operations.
Here are a few of the key takeaways from the hour-long discussion. You can view the full webinar recording here.
The MORE Act is Back
On April 1, 2022, the Marijuana Opportunity Reinvestment and Expungement (“MORE”) Act was passed by the U.S. House of Representatives. The bill would effectively decriminalize cannabis at the federal level by removing its current classification as a Schedule I narcotic, as well as doing away with criminal rulings for individuals who grow, distribute, or possess it.
While this is the second time this has been approved, it has yet to be brought to the floor for a vote from an already divided senate. The group talked about its recent vote in the house, and where they see it going and alternatives such as The States Reform Act.
What’s Going on with Banking and Cannabis?
The Secure and Fair Enforcement (“SAFE”) Banking Act, which was first introduced in March 2019 and is still yet to see light in Congress, aims to lift existing bans keeping financial institutions from working with cannabis and cannabis-related businesses. The three discussed the intricacies of the bills, its current state, and their thoughts on its future.
The Ramifications of IRC Sec. 280E
IRC Sec. 280E was originally created due to a drug trafficker attempting to deduct ordinary business expenses from taxable income back in 1981. Today, cannabis-related business owners are denied the same deduction because of the drug’s Schedule I classification.
During this section of the session, the group covered the true tax implications cannabis-related businesses owners see because of it, as well as what they can do to manage their tax burden.
The New Markets in New Jersey and New York for Recreational Use
A new front in the cannabis landscape over the past few years, both New York and New Jersey have passed legislation to legalize recreational use for adults. New Jersey in particular, on April 21, 2022, began legal sales of cannabis.
Here, we covered the opportunities from both a private business and tax standpoint, as well as what business owners and consumers need to know about this budding new market as well as clarifying the difference between legalization and decriminalization.