Cannabis’s 280E Tax Trap May Finally Break. We’ve Heard That Before.

Section 280E forces U.S. cannabis operators to pay effective tax rates above 70%, an existential burden that a move to Schedule III would immediately eliminate.

MSOS rallied 99% on rescheduling hopes, but prediction markets price just 18% odds by July, and TLRY has shed 97% from its peak.

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While cannabis investors finally have an expedited DEA administrative hearing on the calendar and a fresh Schedule III pathway in motion, Wall Street has stood at this exact intersection before. The pure-play U.S. cannabis proxy, AdvisorShares Pure US Cannabis ETF (NYSEARCA: MSOS), has vaulted 99.2% over the trailing year on rescheduling hope, yet still trades 81.0% below its September 2020 launch price. The pattern of euphoria followed by collapse has been the only consistent feature of this trade.

The catalyst this time around centers on Section 280E. That single line of the tax code denies cannabis sellers the ordinary business deductions every other operator takes for granted, taxing them on gross profit rather than net income, and pushing effec

Fuente original: Yahoo Finance (https://finance.yahoo.com/economy/policy/articles/cannabis-280e-tax-trap-may-144550315.html)