The bureaucratic steps
According to analysts at TD Cowen, the Office of Management and Budget’s review of the proposal will likely last until the end of May or June. The proposal would then have to be published in the Federal Register and there would be a period for gathering opinions. The DEA will then have to review the comments and will also have to hold a hearing before an administrative law judge. It should be remembered that in 2020 the UN recognized the therapeutic properties of cannabis. Public support for the legalization of marijuana in the United States has increased significantly over the past few decades, reflecting the growing acceptance of the recreational and medicinal use of cannabis. Colorado And Washington they became the first states to allow recreational marijuana in 2012.
The tax implications
For cannabis companies, the change would mean they would no longer be subject to Section 280E of the U.S. federal tax code. This provision prevents companies that deal in Schedule 1 and 2 controlled substances from claiming tax credits and deductions for business expenses. The tax change would inject nearly $3.5 billion in cash back into the sector, which would reduce the overall cost of capital for the industry and unleash a flurry of merger and acquisition activity, Katan Associates International founder Seth Yakatan said.
The impact on business
If marijuana classification were to loosen at the federal level, it could allow major stock exchanges to list companies involved in the cannabis trade and potentially allow foreign companies to start selling their products in the United States.
While many states have legalized the medical or recreational use of cannabis, its illegal status under US federal law has forced most major banks to deny their services to cannabis-related businesses.
Unequal treatment
Biden and Vice President Kamala Harris are seeking to shore up support from the Black community for their reelection bid against former President Donald Trump. According to the American Civil Liberties Union, Black Americans and communities of color have been disproportionately affected by drug law enforcement for decades, with Blacks 3.6 times more likely than whites to be arrested for possession of marijuana, despite similar rates of use. According to data from the Pew Research Center, white and black Americans used marijuana at roughly comparable rates in 2020, yet blacks accounted for 39 percent of all marijuana possession arrests in the United States, despite then accounting for only 12 percent. % of the US population.
