The GreenWave Buzz
our proprietary analysis and commentary on what’s relevant in the cannabis space
It’s Time to FOCUS on Product Safety
SUMMARY Protecting consumers' safety, health, and well-being are arguably the most crucial considerations for regulators when evaluating approval for any new product. One of the issues included in the forthcoming Cannabis Administration and Opportunity Act (CAOA) is a...
THE SNAKE (IRS) REMAINS IN THE GRASS – – FOR NOW
IRS reiterates its position on 280E. The IRS recently issued a press release reminding taxpayers that until a final federal rule is published on the reclassification of cannabis to Schedule 3, 280E remains in effect. In the meantime, a few of the Multi-State Operators...
Medical Marijuana Average Monthly Spending – A Proxy for the Recreational Use Consumer
Key Points: U.S. Cannabis revenue growth hinges significantly on the emergence of new state markets.Ohio, for instance, is set to kick off its recreational sales next month, a move that couldpotentially be replicated in Florida (through a ballot initiative) and...
California Still Left Holding the Bag
Summary: The state of California is owed ~$732M in arrears for sales & use, excise and cultivation taxes including penalties and interest. The vast majority (72%) is due from establishments that are out of business. The California Department of Tax and Fee...
MORE 280E REFUND CLAIMS HEADED TO THE IRS “JOINT” COMMITTEE – DOES ONE SIZE FIT ALL?
Key Points: Trulieve’s recent $113 million refund has prompted other operators to reevaluate their past and future strategies as the punitive 280E tax continues to wreak havoc on the Cannabis industry. We hosted a webinar discussion to help investors better understand...
RE-SCHEDULING CANNABIS: LEANING INTO FREE CASH FLOW AND CAPITAL MARKETS
Key Points The Department of Health and Human Services (HHS) released details of its recommendation to re-schedule cannabis from schedule I to III; Drug Enforcement Agency (DEA) approval is pending but opposition and court proceedings could still delay re-scheduling....
U.S. Cannabis: A Reset Looming
With the progression of individual state regulated markets, entrepreneurs, investors and other industry participants have remained intoxicated by the prospects for federal cannabis reform. These interests have been further inspired by the U.S. Federal Government’s...
WEEDING OUT THE ILLICIT MARKET (UPDATE)
Arguably, one of the greatest challenges confronting the U.S. cannabis industry is the continued pressure from a thriving illicit market. Consequently, same-store top line increases have generally been insignificant and near- term consensus revenue growth projections...
A Comparative Look at Valuation
Cannabis stocks have advanced sharply since August 29th when the U.S. Department of Health and Human Services announced its recommendation to remove cannabis from a Schedule 1 narcotic to Schedule III. The precise timing of the Drug Enforcement Agency ruling...
RE-SCHEDULING MARKS A NEW DAY FOR NET OPERATING LOSS (NOL) CARRYFORWARDS
Section 280E of the Internal Revenue Code disallows businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the Controlled Substances Act. Once moved to Schedule...
Distribution Mayhem In California: Who’s Left Holding the “Bag”?
Herbl, one of California’s largest licensed cannabis distributors is in receivership. Last year it served ~1K retailers and accounted for ~18% (~$700M) of the state’s $3.8B retail sales amount. Other licensees could be at or near a similar breaking point. California...
ONE STEP FORWARD ON THE ROAD TO FEDERAL REFORM
The announcement last week by the department of Health and Human Services (HHS) that it is now recommending the rescheduling of cannabis from schedule I to III, marks a significant inflection point for federal cannabis reform. The timing of the Drug Enforcement Agency...