Happy Monday.
We’ve got a new crew putting the newsletter together this week – let us know what you think.
Now, let’s get to it.
-CC, JR
Today’s newsletter is 633 words or about a 5-minute read.
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💡 What’s the big deal?
CULTIVATED EXCLUSIVE
For cannabis companies, a win on taxes, a loss on costs in 2026
Writing today exclusively for Cultivated, Justin Leiby – Professor of Accountancy in the Gies College of Business at the University of Illinois and faculty in Residence at the Cannabis Research Institute at the University of Illinois – discussed how policy changes at the federal level would benefit – but also hamper – progress in the industry.
The regulated cannabis industry confronts a strange moment: long-awaited federal tax relief may arrive in 2026 as tariffs offset the benefits.
For years, operators have awaited the end of Section 280E, a federal tax rule that prevents cannabis businesses from deducting ordinary operating expenses like rent and payroll. Operators in Illinois estimate that 44% of 2024 operating expenses were nondeductible under 280E, according to regulatory disclosures. Using public financial filings, I estimate that 280E consumes 52% of operating profit. Assuming a 21% corporate tax rate, operators pay an $92 penalty for every $1,000 spent.
Relief finally looks possible. A December 2025 executive order accelerated rescheduling, which would remove operators’ exposure to 280E. However, even if that happens, the benefit may not show up on the bottom line.
📣 Quotable
During a House Energy and Commerce Subcommittee meeting, Congresswoman Alexandria Ocasio-Cortez said, “Our current drug scheduling system in the U.S. does little to deter drug abuse or overdose rates, but instead hinders research and unfairly criminalizes communities…” plus, “We need to invest in actual solutions like prevention, treatment, and recovery.”
⏩ Quick hits
Congressman Steve Cohen (D-TN) sent a letter last week to Attorney General Pam Bondi and DEA Administrator Terry Cole to ask what’s up on the process to reschedule cannabis. For good measure, the Congressman also wants to know why the DEA is missing deadlines for updates. More from Marijuana Moment.
⏪ In case you missed
On Friday, Chris Casacchia joined This Week in Cannabis Live regulars Jeremy, Jay, and AnnaRae Grabstein from High Spirits. During the program, Jeremy laid out the brutal macro environment for cannabis operators: rising input costs, declining wholesale prices, and tariff pressure all hitting at once.
🧳 People moves
Long-time cannabis reporter and Managing Editor of Marijuana Moment Kyle Jaeger, announced on LinkedIn that he’s moving on from Marijuana Moment to take on the role of senior statehouse reporter at State Affairs. From the Cultivated team – we’re wishing Kyle the best.
Storz & Bickel’s co-founder Jürgen Bickel is moving on from his leadership of the company, which is owned by Canopy Growth. David Männer will be taking over the role of Managing Director. Bickel joined Cultivated Live last year, in case you missed it. $WEED ( ▼ 6.47% )
The California Department of Cannabis Control has posted a new job, which might be interest to someone in the Cultivated world: Senior Legislative Specialist. This person “serves as the lead federal policy analyst for the Department and is responsible for developing and advancing the Department’s federal legislative and intergovernmental affairs program…” Let’s hope there are some federal policies to analyze at some point soon.
📰 What we’re reading
New Mass Cannabis Business Owner Addresses The Threat Of Repeal | Talking Joints Memo