The tides are turning for Minnesota's marijuana movers and shakers as a proposed federal reclassification stands to fatten wallets across the burgeoning industry. In a landmark move, the U.S. Department of Justice has tabled a proposal to reclassify marijuana from a Schedule I to Schedule III drug, as reported by CBS News Minnesota, a shift that may not legalize pot from sea to shining sea but promises to slash heavy tax burdens under the formidable Section 280E that have long crippled cannabis companies' checkbooks.
Indeed, these cost cuts are significant, Nikki Rohloff, managing partner at Rohloff Associates and Canopy Accounting, suggested savings could be in the ballpark of 40% to 70% depending on the nature of the operation, this could lead to more investments back into the businesses and perhaps bolster community development too, she told CBS News Minnesota. At present, the draconian tax code kneecaps cannabis commerce by denying the basic business expense write-offs afforded to industries less mired in legal limbo.
The repositioning of marijuana alongside substances such as ketamine and anabolic steroids, which sit comfortably as Schedule III drugs, signals a relaxing of fed's iron grip—potentially spurring economic growth and innovation in Minnesota's market. A cannabis attorney from national law firm Vicente LLP, Jason Tarasek, highlighted to CBS News Minnesota that the shift would likely precede further reforms and, crucially, turn the page towards a new chapter where cannabis might be "treated just like alcohol and regulated just like alcohol." Tarasek relayed his optimism regarding a gradual erosion of federal and state policies rigged against marijuana.
Though the process to reevaluate marijuana's standing is only just churning into gear, Rohloff is playing the long game, advising clients with an eye for the future and helping them factor in current federal tax demands in their financial scheming, ensuring if and when the laws loosen, it'll be a windfall rather than a misstep not accounted for. Even as the Justice Department's gears grind, the wheels are in motion in Minnesota with state regulators set to parcel out pre-approved business licenses later this year—anticipating a grand opening of retail stores the following year, Rohloff said she's counseling her clients to still keep 280E in mind, just in case, according to CBS News Minnesota.
According to the Star Tribune, Mark Waller, a Minneapolis accountant, is singing a similarly hopeful tune, describing the move as a "shot in the arm" for current and aspiring cannabis moguls. However, although tax relief is nigh, Waller cautions that businesses must remain awash in green (of the monetary kind) to survive the initial plunge into pot's murky markets. The silver lining is that there's now "a little more opportunity" for those daring to dream of dank dividends.
But it's not all about lining pockets; wider implications of easing federal restrictions beckon. Leili Fatehi, a cannabis legalization advocate in Minnesota, sounded a note of caution, imploring that forthcoming policies should "prioritize social equity and justice" to ensure that the fruits of legalization are shared broadly and equitably. While the reclassification kindles hope of medical research and economic development, Fatehi stressed that this step is but an early stride on a longer journey of reform.
