The rescheduling of cannabis may come to pass as new regulations are continuously being made. What does this mean for cannabis companies like yours?
Cannabis businesses can have more opportunities open for them and have a better outcome in terms of selling cannabis to the public.
With the current state of cannabis right now, there’s not a lot you can do for your business. This can change, impacting testing facilities, retail shops, and cultivation facilities.
Staying up to date on current regulations and trends is what you need to do to succeed in the volatile market. Cannabis being rescheduled is no different and you need to make sure you’re ready for it, which is essential for your business to grow.
Let’s explore what you should know about federal cannabis rescheduling so you can stay prepared.
Status of Federal Cannabis Rescheduling
The rule was submitted to the federal register by the Department of Justice (DOJ), proposing to reschedule cannabis from Schedule 1 of the Controlled Substances Act (“CSA”) to Schedule 3 (“NPRM”). A formal rulemaking must occur to consider whether cannabis should be rescheduled or not.
Whether this occurs is currently not known, and only time may tell until the ruling is completed. However, is a first step to allowing more legal leeway for cannabis owners.
Why Cannabis Businesses Should Care About Rescheduling
Why care about the rescheduling of cannabis? If cannabis were to become rescheduled then your business could have more opportunities and have fewer regulations to worry about.
Benefits Your Business Can Expect
- Legal Clarity and Protection
Your business can have legal clarity and protection on cannabis than what is currently allowed. It can operate smoothly without thinking about whether the bud you’re selling is up to legal standards.
- Improved Access to Financial Services
Many cannabis businesses can also have improved access to financial services to store money in a bank or seek potential loans. This helps curb the security risk of working with cash-only transactions in retail shops and related businesses in the cannabis industry. Not only this, but a cannabis company won’t have to consistently maneuver through regulations charged under Schedule 1 substance drugs.
- Tax Benefits
Another benefit is not having to pay for business expenses and actually deduct normal costs that Section 280E of the Internal Revenue Code enforces on Schedule 1 substances. With rescheduling, your business won’t need to have more money coming out of the business but be taxed less which is more money for your business.
- Expanded Market Opportunities
Cannabis companies like yours can also have better and more expanded market opportunities. You can access better and more research for the development of cannabis products leading to innovation and diversification. There may be new products on the rise with better research and development, but only time can tell.
- Enhanced Medical Research
Medical research can be extended to learn more about the scientific discoveries and development of cannabis. New medical discoveries can bring about new phytocannabinoids and more business.
- Strengthened Supply Chains
There is also a chance of a strengthened supply chain making it more secure to grow product production and sell more.
- Better Operational Expenses
Reduced regulations can allow for easier distribution channels, reaching a wider range of consumers. Fewer regulatory hoops to jump through can lead to lower operational expenses. Streamlined processes can increase production efficiency and reduce overhead costs.
How To Prepare For Federal Rescheduling Of Cannabis
To prepare for possible rescheduling of cannabis, you need to continue paying your taxes as per regulations.
It’s best to continue doing business as usual, but you can stay ahead and prepare by doing the following:
- Start forecasting for future outcomes: You need to plan and predict possible outcomes, such as banking loans, taxes, and cost reduction.
- Identify priorities: Identifying the priorities is essential to knowing what tasks come first so you can grow your operation successfully.
- Plan out your goals: Then you need to plan your goals and figure out how you’re going to accomplish them. What resources are you going to use and who’s going to be in charge of what, before rescheduling takes place.
- Create a strategic plan: It is also best to create a strategic plan and get all your financial duties in order. Whether you’re hoping to get more capital from a credited bank or want to expand your operations into a new product market of the cannabis industry, strategizing your plan can put you ahead of everyone else.
- Be ready: Lastly, you need to be ready when they do reschedule cannabis. It may not happen immediately but over the course of a year or more. Being prepared is the best thing you can do for your business.
These steps can help you grow your operation and stay ahead of the oncoming rescheduling of cannabis.
In Summary: Next Steps
Now you know about the federal cannabis rescheduling, it’s time to continue to adapt to new regulations changing every year. Stay close to the laws and rules, so you can be the first to make the switch.
As you know regulations change every year and it’s hard to keep up if you don’t have a close eye on it. This is understandable considering how much work a business takes to run let alone trying to maneuver through the nuances. It’s best to find an accountant who can help you take some of the work from you so you can focus on the important aspects of business.
To help you out even further, a cannabis accountant can help you prepare for the changing of regulations. At Green Space Accounting, we work with companies to enhance their accounting and financial needs from forecasting financial outcomes to creating a financial plan.
Consult with us today!
