Credit cards, advertising and more: Cannabis rescheduling means growth

With President Donald Trump’s executive order last week to downgraid reschedule cannabis, leading businesses in the industry are rolling out their growth strategies.

MariMed, Ascend Wellness Holdings and other key players are focusing on expansion, innovation and operational upgrades as doors that were long closed begin to open.

Rescheduling frees the $32 billion legal U.S. cannabis industry from 280E of the Internal Revenue Code, promising near-immediate benefits in the form of federal tax relief. Rescheduling is also expected to encourage major institutional investors to enter the cannabis space and lower borrowing costs.

But at the same time, multistate operators will need to be ready for more regulation, such as more traditional accounting and financial scrutiny, according to Norman Yousif, CEO of cannabis store chain Off The Charts.

How rescheduling could supercharge cannabis industry growth

With the cost of capital likely to drop, Ascend Wellness CEO Sam Brill has his sights set on supercharging the MSO’s retail expansion and improving financial efficiency. Plans for New York-based Ascend Wellness include expanding into new states and acquiring other businesses. The vertically integrated company operates in Illinois, Michigan, Ohio, Massachusetts, New Jersey, Pennsylvania and Maryland.

Although it won’t happen immediately, Brill anticipates that his stores will be able to accept credit cards, which will boost customer convenience and basket sizes, while streamlined banking will improve overall efficiency.

“The fact that customers can use credit cards is a game changer for our industry,” Brill said. “It extends their wallet. Cash is pinching customers because they have to think about the cash they have today.”

For Jon Levine and the team at Massachusetts-based MariMed, rescheduling is a green light for aggressive growth. Removing the burden of 280E will give the MSO better cash flow and allow it to expand into new states more rapidly than it otherwise could.

“We weren’t looking at CBD only, but this gives us the opportunity to help people who can use Medicare and Medicaid,” Levine said.

Curio Wellness co-founder Wendy Bronfein said her company is already positioned to capitalize on rescheduling. The Maryland-based company plans to expand clinical and product research and development, particularly around minor cannabinoids and specific health conditions.

“We built our facilities through the lens of assuming we’d be governed by the FDA,” said Bronfein, who started the company with her father, Michael Bronfein. “The unexpected piece is the conversation that’s happening around minor cannabinoid access. We have several strategic products that could immediately transition to that market and not be relegated to dispensaries.”

Curio has had a scientific advisory board since its inception, and board Chair Dr. David Casarett, professor of medicine at Duke University, thanked Trump at the executive order signing, saying, “I never really thought this day would come.”

Rescheduling could transform cannabis innovation

But with prohibitionists vowing to challenge cannabis’ looming reclassification via the courts – and with the exact date when marijuana will be rescheduled far from clear – not all companies are making expansion plans.

Village Farms International, for example, is listed on Nasdaq under the ticker VFF, but is registered as a Canadian company. Because of its U.S. listing and illegality of cannabis, the company is focused on international cannabis markets rather than the United States, CEO Michael DeGiglio said.

“We want to be very active in the U.S. market, but we’re not going to go in half-cocked without understanding what the regulations are,” DeGiglio said. “We’ll help shape regulation and continue to battle to make sure it gets traction. We’ll collaborate with policymakers.”

With the U.S. rescheduling, Tilray announced the formation of Tilray Medical USA Inc. on Dec. 18, boosting its commitment to medical cannabis innovation and growth.

Chairman and CEO Irwin Simon said Trump signing the rescheduling executive order creates a “more credible foundation for medical cannabis research, clinical development and regulatory clarity.”

“It also signals a future shaped by innovation, responsible oversight and evidence-based policy,” Simon said in a statement. “We believe this landmark decision is a significant catalyst for positive change within the health, wellness and business communities across the U.S. and a critical incremental step toward descheduling and comprehensive regulation.”

Colorado-based Green Dot Labs co-founder and CEO Alana Malone said rescheduling represents important progress after more than a decade of navigating an uncertain federal landscape.

“It begins to address long-standing barriers such as limited access to banking and significant tax burdens, while opening the door to increased investment in research, innovation and product development,” Malone said in a statement.

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.