The US Supreme Court’s June decision in Loper Bright Enterprises v. Raimondo offers a significant development for cannabis companies. This ruling eliminates the deference previously given to agencies when interpreting ambiguous laws, potentially empowering cannabis companies to challenge the IRS’s interpretation of the Internal Revenue Code, specifically Section 280E, which imposes onerous tax consequences. Legal challenges utilizing this ruling are already in motion.
Meanwhile, Ohio’s adult-use cannabis market has seen a booming launch, with sales exceeding expectations and rivaling established markets like Illinois. The state is attracting customers from neighboring states where recreational cannabis is not yet legal.
This success highlights the increasing consumer demand for legal cannabis. Data from NuggMD shows that 77% of cannabis consumers in legalized states purchase all or most of their marijuana from licensed retailers, supporting the argument that regulated markets can effectively displace illicit sellers.
The political landscape remains a key factor for the cannabis industry. Cannabis is expected to be a central topic in the upcoming November elections. While progress has been frustratingly slow, the fight for cannabis legalization continues with conversations intensifying on both sides of the political spectrum.
The industry is also closely watching the potential reclassification of marijuana to Schedule III by the DEA, which could significantly reduce tax liability for large cannabis companies.
The cannabis industry is in a state of flux, navigating legal challenges, booming markets, and political complexities. The coming months will be pivotal for the industry’s future, with the November elections potentially shaping the landscape for years to come.
