Benzinga - by Maureen Meehan, Benzinga Editor.
In a swift, almost frenzied surge, cannabis stocks soared following Tuesday's news that the DEA intends to begin the process of moving marijuana from its onerous Schedule I designation to Schedule III.
One of the major benefits of this long-awaited move lies in the expected changes in the tax law.
If marijuana transitions from Schedule I to III, cannabis companies will be able to write off standard corporate deductions. That’s a benefit unfairly denied to them for years, forcing them to pay exorbitant taxes.
Green Market noted that some companies — Green Thumb Industries (OTCQX: GTBIF), Verano Holdings (OTCQX: VRNOF) and Cresco Labs (OTCQX: CRLBF) — could boost their bottom lines by $70 million to $100 million potentially starting this year.
This rescheduling offers a much-needed reprieve for an industry beleaguered by plummeting prices, fierce competition, and burdensome taxes.
"Taxes were strangling these companies. Now all the sudden we're talking about a growth sector again," Morgan Paxhia told the outlet. As co-founder of Poseidon Asset Management, Paxhia has been a regular guest at Benzinga's Cannabis Capital Conferences.
Speaking of which, anyone wanting to learn more about the future of the cannabis industry and how or if it's a great time to invest should plan to attend the Benzinga Cannabis Capital Conference this October in Chicago. Hear directly from key industry players and policymakers. Get your tickets now by following this link, and access a 20% discount using the code JAVI20.
Cannabis Stock Short Sellers Get Clobbered
The biggest losses for short sellers were from two stocks: Tilray Brands Inc. (NASDAQ:TLRY), which jumped 40% and Canopy Growth Corporation (NASDAQ:CGC) that led the gains as it skyrocketed by 78.8% to close at $14.88 per share. The trading frenzy pushed the volume to 79.25 million shares.
The short-selling pains notwithstanding, Paxhia sees the potential listing of cannabis companies on U.S. exchanges as significantly elevating their market value and potentially tripling or quintupling their worth compared to Canadian markets.
Image: Midjourney
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