The Associated Press reported Tuesday that the Drug Enforcement Administration will propose reclassifying marijuana to a lower, less severe rung of illicit substances, providing relative taxation benefits for dispensaries.
If the DEA moves marijuana from Schedule I – alongside heroin and LSD – to Schedule III, which includes anabolic steroids, ketamine and Tylenol with codeine, businesses could save millions in taxes, said Ross Gordon, policy director with the Humboldt County Growers Alliance, a local cannabis industry trade group.
“For a lot of businesses, especially for dispensaries, (reclassification is) a really big deal. That’s probably worth tens or hundreds of millions of dollars of tax savings across the state of California,” Gordon said. “That’s something which is likely to benefit everyone. When dispensaries have more money, they can pay the farmers more money.”
Given cannabis’ current status as a Schedule I drug, industry professionals, such as dispensary operators, cannot deduct business expenses and pay federal tax on all their income. If the DEA moves forward with reclassification, cannabis businesses would be able to make normal tax deductions comparable with other, non-cannabis businesses.
The benefits of such a move would mostly fall on dispensaries, but cultivators will see improvements in payments from dispensaries they sell to,
