Craig-Hallum analyst Eric Des Lauriers notes that the Drug Enforcement Administration, or DEA, announced it agrees with the Department of Health and Human Services that cannabis should be moved from Schedule I to Schedule III under the Controlled Substances Act, telling investors that “by far the biggest impact from an investor perspective” is that cannabis operators will no longer be subject to onerous 280E taxes, which effectively tax these operators on gross profit instead of normal pretax income. The firm, which expects this decision to initially provide a significant boost to cash flow from operations, followed by significant increases in capex and marketing spend for many operators, recommends buying shares of “high quality, efficient operators,” including Green Thumb Industries (GTBIF), Trulieve Cannabis (TCNNF) and TerrAscend (TSNDF). Other publicly traded companies in the cannabis space include Aurora Cannabis (ACB), CV Sciences (CVSI), Canopy Growth (CGC), Cronos Group (CRON), Goodness Growth (GDNSF), IGC Pharma (IGC), Tilray (TLRY) and Trees Corporation (CANN).
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