Editor’s note: This commentary is provided by the Medical Marijuana Education and Research Initiative (MMERI) of Florida A&M University.
The reclassification of medical marijuana as a Schedule III substance is expected to improve the financial outlook for licensed cannabis businesses by providing tax relief and expanding access to banking services.
According to Tampa-based CPA Dyezae Smith, owner of Aezalle Tax Advisor, state-licensed medical marijuana operators will be able to deduct ordinary business expenses on their 2026 tax returns. Previously, Section 280E barred businesses handling Schedule I or II substances from deducting expenses such as rent, payroll, and marketing.
Mr. Smith says the change could return millions of dollars to cannabis companies that have experienced tax rates as high as 60%.
“A lot of companies are going to use that extra capital that’s coming into their business to pay off loans and other business-related debt,” he points out. “A lot of these companies are underbanked, they’re overleveraged, they don’t have the cash flow that they had hoped over the past few years. They’re going to use that first wave of relief to stabilize operations.”
Although the U.S. Department of Justice has encouraged relief from past Section 280E penalties, the IRS has not signaled that amended returns will be allowed.
Mr. Smith is skeptical of retroactive tax relief but optimistic that reclassification could improve banking access, as regional banks and credit unions may become more willing to serve medical cannabis businesses. While Florida operators could benefit from the state’s seed-to-sale model, he says consumers should not expect lower dispensary prices anytime soon.
Visit bit.ly/MMERIMAY2026 to watch MMERI’s Conversations on Cannabis Virtual Forum featuring certified public accountant Dyezae Smith discuss “The Ripple Effects of Cannabis Reclassification.”