Will Cannabis Rescheduling Ease Bankruptcy Woes? Legal Experts Weigh In
The rescheduling of cannabis from a Schedule I to a Schedule III substance under the Controlled Substances Act (CSA) presents a labyrinth of legal repercussions, particularly in the realm of bankruptcy law. While many celebrate this potential federal shift as a step towards normalization, the reality remains complex and fraught with legal intricacies that could significantly impact cannabis-related businesses across the nation.
Analyzing Legal Impacts Of Cannabis Rescheduling
This complex legal landscape is dissected in a detailed analysis by Joel Cohen of Stout Risius Ross LLC, and Heidi Urness of McGlinchey Stafford PLLC, published by Bloomberg Law in July. For the authors, despite the euphoria surrounding the rescheduling, it is critical to understand that this change does not equate to federal legalization.
They emphasize that while rescheduling might reduce the tax burdens under IRS tax code section 280E—which prevents cannabis businesses from deducting typical business expenses—it does not equate to federal legalization. Most cannabis operations will …