It's a quick read...sorry I'm so late posting...I'm thinking PVSP is up to speed with all this crap and will bring us the correct business plan when the time is right...I wouldn't shy away from pot investments because of this!
Last year President Biden launched a review of marijuana’s status as a Schedule I drug. Late last month, the Department of Health and Human Services (HHS) reportedly recommended that marijuana be reclassified as a lower-risk Schedule III substance (alongside steroids, ketamine and Tylenol with codeine), instead of the nonsensical Schedule I status (heroin, LSD) it was shoehorned into by the hippie-hating Nixon administration.
If the Drug Enforcement Administration agrees with HHS, a down-scheduling would compel the Internal Revenue Service to stop treating legal state-licensed companies like Miami Vice-era cocaine smugglers. That’s no small thing. Congress created the federal tax code’s Section 280E in the early 1980s specifically to penalize companies selling substances listed as Schedule I or II. As a result today’s state-licensed cannabis companies are effectively taxed at rates ranging from 60 percent to 90 percent.
Although moving marijuana to Schedule III would offer tax fairness to all legal operators, it wouldn’t change their status as federal criminals. Basic banking services would remain forbidden to them. And for the first time, it would create a new path to federally legal, FDA-approved status—a path that only major pharmaceutical companies can likely afford.
In every other industry, small businesses utilize a portfolio of programs to help them compete in a robust marketplace. The engine that drives America’s economy is the government-backed small business loan. These financial instruments, partially guaranteed by the federal Small Business Administration (SBA) and secured by local banks, turn promising business plans into thriving, wage-paying operations. They allow prosperous companies to expand. When disaster strikes, they help businesses recover.
SBA loans are available to all American entrepreneurs—except those running state-legal cannabis companies. Even with Schedule III status, banks would risk running afoul of anti-money laundering statutes. SBA officials would remain bound by marijuana’s still-technically-illegal federal status.
Still...
Bullish
