MISSOULA— The cannabis industry has high hopes after President Trump recently signed an executive order asking federal regulators to reschedule cannabis.
“Best guess is we'll see maybe up to 50% drop in tax overhead. I'm not sure. But, you know, I hear stories, you know, and again, we can dream,” said Andrew Machain, the owner of Stokes Dispensary in Missoula.
Cannabis is currently a Schedule I drug, meaning it has some of the highest restrictions on it.
Watch to learn more about the possible impacts on the cannabis industry in Montana:
Machain says while medical and recreational cannabis may be legal in Montana, there are still hurdles cannabis operations face, mainly taxes.
“We've been burdened with huge taxes over the years just because we can't actually take a write-off on profits. It's just a write-off on gross. So it's a pretty big hit,” said Machain.
For companies like Sinful Beverages, a cannabis company that formulates products and then licenses them out, the rescheduling would not only mean a tax break, but also usher in the entrance of major institutions to help study the plant.
“What rescheduling does for the most part is it does two major things. It really opens up the way for universities and companies to do research on developing drugs with cannabis," explained Sinful Beverages co-founder James Stephens. "So you know, pharmaceutical interventions, stuff like that, on that level and then the other one it does is it removes or has the potential to remove what's called the 280E tax burden."
There could also be another benefit to the rescheduling: the potential for more professionals to come into the cannabis industry.
“We need the help from, you know, real licensed accountants, CPAs, to help us through this. And I think that that's going to make it a lot more comfortable for real professionals to come out and support us,” said Machain.
While President Trump may have ordered the rescheduling process to be expedited, there are still five steps that must be taken before it can be fully rescheduled. This includes studies and medical evaluations, notice of the proposed change, public comment, a hearing and then a final ruling by the DEA.
Industry professionals told MTN that they expect the process to last anywhere between one and three years.
