KEY POINTS:
- With two full years of public company disclosures, we provide a detail analysis that suggests a minimum federal excise tax of 10% upon the end of federal prohibition.
- The MORE Act currently includes a 5% excise tax (with a gradual increase to 8% over three years) which we believe is insufficient to replenish lost 280E tax revenues particularly as the IRS
continues to scrutinize cannabis businesses for additional payments. - We examined all publicly traded Multi State Operators (MSOs) with audited financial statements and a market capitalization in excess of $1 Billion.
- Our review accounts for 10% and 18% of total U.S. cannabis retail sales in 2019 and 2020 with 280E tax collections of approximately $1.4B and $1.9B respectively.
