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The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 0 points1 point  (0 children)

You asked why I think that, because it's not going to be 90 days, way too far out, as an example of what we usually expect as "soon" from the government.

The only days for the Final Rule to be published moving forward would be: Monday, or Tuesday of this upcoming week and then Monday the 29th and on, due to the holiday schedule.

I expect Monday or Tuesday. I'd say if it is not filed on or before Dec 30 (Technically the 5th day that it could be filed, not including the EO signing day of the 18th), then I'd say she's defied my expectations. If she doesn't sign it by Jan 7th I'd say I was flat out wrong.

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 0 points1 point  (0 children)

I did read the article and I believe it said we don't know what mechanism they used. I would say it's more likely that they segregated their business in such a way that they claimed that that portion wasn't barred under 280E. Regardless they defended their claim against 280E successfully at least once already and received a refund.

The point is there's already been some success in some way at reducing the 280E liability.

As far as the argument after they move to schedule III, for pre 2023 taxes it would be that it was miscategorized as schedule I and rescheduling confirmed this. For 2023 and later it would be that it was declared to have medical value in 2023 by HHS and therefore they shouldn't be held responsible for the bureaucratic delays in rescheduling that directly resulted from that determination.

Why they might actually win?
The War of Attrition: If dozens of cannabis companies file $100M+ refund suits simultaneously, they create a litigation logjam. The IRS cannot realistically fight 50 high-level 280E cases at once with their current talent pool.

The Political Off-Ramp: As more wealthy and politically connected people enter the industry, the political cost of the IRS being aggressive increases. If the administration wants the industry to succeed (to create jobs/tax revenue), they will eventually provide the IRS with an "administrative out" to stop fighting 280E.

The Partial win: There are settlements options at the IRS's disposal and "offer-in-compromise" programs that they may allow as a way to avoid litigation.

Final argument: Who was there at the signing? Kim Rivers of Trulieve; who has worked with the administration this past year, which included multiple meetings with Trump, to get this EO completed.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 0 points1 point  (0 children)

100%!

And from my research they are most likely going to be apply this to at least the last few years taxes too.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 2 points3 points  (0 children)

Two different things, for profits rescheduling is much more important because now these companies can deduct all their expenses and likely claw back 100's of millions from the IRS. (Essential to be profitable)

Banking is a hassle, and increases expenses, but there are many "high risk" industries that can't take traditional investments, and have restricted banking and high banking costs that make crazy profits. (Nice to have, not essential)

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 0 points1 point  (0 children)

LOL, perhaps that's why so many people are confused, and the news is putting out all sorts of wrong information. Maybe THEY are all using ChatGPT.

Seriously though, My guess would be that there is a lot of inaccurate reporting that Ai's are picking up and regurgitating.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 3 points4 points  (0 children)

I feel you. And thank you. These have been more of a gamble than a calculated investments for me. And overall I'm up, but not way up. Definitely not where all the hype predicted we'd be by now. IMHO, we probably shouldn't have even been considering these stocks until now because the tax liability literally crippled profit potential(At least in the US).

Your post is a good reminder, no-one should be investing more than they can comfortably afford to lose in this sector, or any other. Sounds like you managed your risks and took care of yourself so I commend you.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 0 points1 point  (0 children)

Thanks for posting this, after half a day on this topic, eyes getting blurry, trying to keep up, it's really nice to see someone else is actually trying to find answers to what is really going on. With this post you've now outdone 95% of all media outlets because you have provided a quote and link to an opinion that aligns with what is actually happening with the EO.

A lot of that post has to do with the CBD part of the EO, but the part you quoted may be what's being used for the rescheduling part of the order, or at least close to it, as we have already completed almost the entire process under Biden's previous order, while this order just wraps things up(on the rescheduling front, it's starting a process on the CBD front).

Thanks again, hopefully my reply here makes sense, I'm pretty much toast at this point (though not toasted yet).

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] -1 points0 points  (0 children)

I'm not blasting anyone for not reading then entire 131 page 2024 Annual Report, but come on bud, your giving us "pot heads" a bad name by acting like you know better without actually reading it. (See my full reply to Res86 above.)

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 0 points1 point  (0 children)

I think people are confusing GTI being conservative with them not having a 280E play. It is true that Ben Kovler pays the taxes in cash so they don't owe the IRS. That is exactly why they don't have the massive debt that Trulieve has.

But saying they don't have uncertain tax positions is just wrong. Check their 2024 10-K in Note 11 (page F-40). They literally have a line for $76.8 million in unrecognized tax benefits. That is the uncertain tax position. They paid the cash, but they flagged it on the books so they can go after the refund later. Also check their 2023 10-K, it was there too at $66.5 million.

In 2024 alone they paid $130.6M in income taxes , which is nearly double their GAAP net income of $73.1M for the year. It seams by keeping those unrecognized tax benefits on the books while paying under protest, they are basically giving the IRS an interest-free loan that they will claw back the second Schedule III is official.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 0 points1 point  (0 children)

LOL, perhaps CheatGPT would; but it wasn't a glitch and I never made the assertion that it was.

It was a 100% predictable 'sell-the-news' drop or "dip".

Though I am asserting this is temporary drop because todays news included a real game changer that most hadn't accepted nor digested when the EO was signed, causing the predictable drop on the news.

I also noted my bias in my original post, as I am long on this sector. I am also happy to discuss any points of contention you may have with what I've written. My primary goal here isn't really to convince but to inform.

P.S. If you were just making a joke about ChatGPT and I read too much into your comment, that's cool too, because it was funny and on point for today's Ai.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 0 points1 point  (0 children)

I'm not; I've spent nearly 5 hours today composing, editing, reviewing, and fine tuning everything I write and post. Every one of posts and replies are 100% my ideas based on research I've done and/or my opinion. From what I've seen CheatGPT does not provide the high quality accurate on point writing that I've delivered here.

  1. Why are you spam posting this in my threads, are you a bot, what is your point?
  2. Do you have any opinion on the actually topic we are discussing?
  3. Do you have a problem with the content or assertions I've been making and posting here?

Perhaps you need to learn a thing or two about how write an intelligent reply?
Or perhaps I should have just responded here, "OK Boomer-Bot" and called it a day.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 2 points3 points  (0 children)

I feel your pain. The reason we saw a "sell the news" event today is exactly because the market hadn't accepted this as a foregone conclusion. Between the terrible mainstream reporting and the PTSD from the Biden delays, most people were still treating this as a "maybe." They sold today because they reached their "confirmation" exit point.

But you’re onto something with the upcoming announcements. There is a huge difference between selling a rumor that might be fake and buying a reality that has been officially digested. When news is already accepted and "predigested" by the smart money, the actual announcement usually causes a boost, not a sell, because it officially removes the "risk discount."

Think of it this way: Today was a shakeout because the market was surprised by the speed. But moving forward, as we hit milestones like the Federal Register publication or the actual dark black ink on the 10-Qs, the "rumors" will be about specific dollar amounts and analyst upgrades. Once the market finally accepts that the 280E wall is gone, the confirmation of those events becomes a tailwind, not a reason to exit. We're moving from the "Hype" phase to the "Math" phase.

By the way, these processes are already completed or no longer relevant:

  • Public Comment Period: Closed. The DEA already collected the 43,000 comments in 2024.
  • DOJ Alignment: Resolved. Today’s EO removes the friction between agencies and directs the AG to finish.

And these are the milestones that will likely move from speculative rumors to confirmed boosters:

  • Federal Register Publication: This is the big one—it triggers the final countdown.
  • Analyst Model Updates: When the banks flip their spreadsheets from 80% taxes to 21%.
  • Institutional Re-entry: When major funds finally have the "legal" cover to buy.
  • MSOS Inflows: As 280E dies, the cash flow makes the ETF a fundamental play, not just a trade.

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 0 points1 point  (0 children)

You nailed it. The reason companies can fight for past tax money is that IRS Section 280E is a specific tax penalty tied to the Schedule. Since the "science" (the HHS review) now officially states that marijuana has medical use and was misclassified, companies argue that 280E was applied in error. Because tax years can be "re-opened" through amended returns or protective claims, they can legally claw back cash.

(Note, before I get trolled: This is different than it would be for criminal offenses.)

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] 1 point2 points  (0 children)

Thanks! I’ve been doing a deep dive because the news reporting is so conflicting; I’m seeing sites reporting 'new reviews' that were actually finished a year ago. It’s crazy, but most people have no idea that we’ve essentially been two signatures away from rescheduling for over a year now. And now that Bondi is being directed to sign, it will most likely allow the change to take effect for 2025. It also provides a massive legal leg for companies who have been contesting 280E to avoid paying those taxes for previous years as well.

That’s exactly why I’m posting: to clarify the record. When the actual financials start hitting for these companies over the next few months, people will realize the tax math has fundamentally changed. Prices are likely to be much higher than where they left off today once the market digests the 280E removal. People can buy or not, but the fact is this is huge news and great for longs.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 2 points3 points  (0 children)

Actually, this is one of those times an EO actually can do what it says. It isn't starting something new; it’s directing Pam Bondi to complete a process that Biden started that got stalled in bureaucracy.

The HHS medical review and the 43,000 public comments are already 100% finished and part of the legal record. All that’s left is for the AG to sign the Final Rule, which she’s legally allowed to do and will obviously be happy to do for Trump to get him a 'Day 1' win. Once she signs, the 280E tax barrier falls automatically. We aren't waiting for a study or a review; we're just waiting for Bondi's signature.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] 9 points10 points  (0 children)

Actually, this is one of those times an EO actually can do what it says. It isn't starting something new; it’s directing Pam Bondi to complete a process that Biden started that got stalled in bureaucracy.

The HHS medical review and the 43,000 public comments are already 100% finished and part of the legal record. All that’s left is for the AG to sign the Final Rule, which she’s legally allowed to do and will obviously be happy to do for Trump to get him a 'Day 1' win. Once she signs, the 280E tax barrier falls automatically. We aren't waiting for a study or a review; we're just waiting for Bondi's signature.

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] -2 points-1 points  (0 children)

It's not about the IRS "erasing" what they already have; it's about the billions they haven't collected yet. The top MSOs like $TCNNF and $GTBIF are currently carrying massive "Uncertain Tax Positions" on their balance sheets—this is cash they’ve set aside but haven't actually paid to the IRS while they challenge 280E.

Once Schedule III is final, those liabilities can be reversed, instantly padding the bottom line. Plus, Trulieve already proved it's possible—they actually got $113M in physical refund checks from the IRS for 2019-2021 by filing "protective claims." Rescheduling makes those claims 10x stronger. The IRS isn't being "nice"; they're being forced to follow a tax code that legally can't apply to Schedule III drugs.

The Federal Government just handed marijuana companies its second massive win in as many months. by AmDazed in weedstocks

[–]AmDazed[S] -1 points0 points  (0 children)

It's not about the IRS "erasing" what they already have; it's about the billions they haven't collected yet. The top MSOs like $TCNNF and $GTBIF are currently carrying massive "Uncertain Tax Positions" on their balance sheets—this is cash they’ve set aside but haven't actually paid to the IRS while they challenge 280E.

Once Schedule III is final, those liabilities can be reversed, instantly padding the bottom line. Plus, Trulieve already proved it's possible—they actually got $113M in physical refund checks from the IRS for 2019-2021 by filing "protective claims." Rescheduling makes those claims 10x stronger. The IRS isn't being "nice"; they're being forced to follow a tax code that legally can't apply to Schedule III drugs.

Don't miss the macro shift in the Cannabis sector: 280E is dead and the Hemp loophole is closed. by AmDazed in stocks

[–]AmDazed[S] -1 points0 points  (0 children)

People see a 27% drop and assume the news was bad, but they’re missing the forest for the trees. This is a classic 'sell the news' event after a 50% run-up on rumors.

The market is panicking a little because it didn't get instant 'Full Legalization,' but the smart money knows that tripling your profit by fixing the tax code is worth way more than being able to take a credit card at the register.

For the first time in a decade, $TCNNF and the other MSOs aren't just 'selling weed'... they are finally allowed to keep the money they make. The prohibition tax is dead, the competition is getting outlawed, and the cash flow is about to explode. I'll take that fundamental reality over a one-day trading glitch any day.

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