Pressure to reschedule cannabis mounts on Federal government - Roth

SNDL

18/03/2024 14:04

** Shares of Canadian pot firms Cronos Group  CRON.TO ,
Trulieve Cannabis  TRUL.CD , Aurora Cannabis  ACB.TO , and
Canopy Growth  WEED.TO  rise between 2.1% and 14.1% 
    ** Shares of SNDL  SNDL.O  and Tilray Brands  TLRY.O  gain
1.5% and 5.8%, respectively
    ** Brokerage Roth MKM flags pressure mounting on U.S.
Federal government to address taxes on the cannabis industry
    ** Unlikely that the Drug Enforcement Administration will
reject the Department of Health and Human Services'
recommendation to reschedule marijuana from Schedule I to
Schedule III - Roth
    ** The reclassification would eliminate Section 280E of
federal tax code for cannabis companies
    ** 280E states that businesses dealing in illicit substances
cannot write off the costs of doing business from their taxes
    ** However, brokerage says U.S. operators are evaluating tax
strategies and opting not to pay 280E taxes after Trulieve
 TRUL.CD  filed amended tax returns and received more than $100
mln tax refund
    ** "Timing around U.S. cannabis rescheduling remains
unknown, but the pressure being applied on the DEA around
rescheduling is more constant" - Roth

 (Reporting by Vallari Srivastava in Bengaluru)
 ((Srivastava.Vallari@thomsonreuters.com;))