EXCLUSIVE: Tax Changes Could Unlock ‘Hundreds Of Millions In Cash Flow’ For Cannabis Sector, Experts Predict
“The fall of 280E will be the single most impactful moment for cannabis operators in decades,” said Aaron Grey, senior analyst at Alliance Global Partners, on Tuesday at the Benzinga Cannabis Capital Conference in Chicago.
The panel, moderated by Claire Hanson, Member-in-Charge of the Denver Office and head of the Cannabis Litigation Team at Clark Hill Law, brought together key voices in the industry to discuss the impact of macroeconomic trends, interest rates, and the potential rescheduling of cannabis.
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The future of the industry, they agreed, hinges on long-anticipated changes to tax policy, particularly the removal of 280E, and the ability for cannabis companies to deduct operating expenses like other legal businesses.
“We’re talking about hundreds of millions of dollars in cash flow suddenly being unlocked for major operators,” Grey said. “Some companies will immediately direct those funds toward M&A, others toward paying off debt or buying back shares—it will vary by operator, but the impact across the board is undeniable.”
Meanwhile, Paul Antonacci, president and CEO of Security Bank, echoed Grey’s enthusiasm, stressing the role banks will play in the post-280E landscape.
“For the first time, we’ll stop hearing that ‘sucking sound’ from operator accounts,” Antonacci said with a chuckle. “This reform will let cannabis companies finally expand organically, without having to rely so heavily on debt.”
Antonacci explained that the current banking environment forces cannabis businesses to operate with razor-thin margins, largely due to federal tax restrictions. “It’s as if the government makes …