EXCLUSIVE: How Federal Cannabis Reclassification Could Transform Business Finances, Insights From Cresco Labs' CEO

"It's a watershed moment for cannabis," declared Charlie Batchell, the CEO and co-founder of Cresco Labs Inc. CL (OTCQX: CRLBF), during an illuminating conversation with Aaron Bry, a content producer at Benzinga.

The two discussed the potentially groundbreaking reclassification of cannabis and the ripple effects this could have on the industry and federal reform.

For readers eager to hear more from Batchell, they're in luck. Cresco Labs' CEO will be a keynote speaker at the Benzinga Cannabis Capital Conference in Chicago on September 27 and 28.

Related Content: Is Federal Cannabis Legalization A Double-Edged Sword? The Answer Is Complicated

The First Domino in Federal Reform?

Batchell sees the recent events as more than just a noteworthy news bite. To him, the current discussion on reclassification is "something that we'll look back on, decades from now as potentially like the first official domino in federal reform."

Despite the optimism, he reminded listeners to remain level-headed. "The total reaction has to be moderated. This is one step in a step process."

The topic of banking naturally arose, with Bry seeking clarity on whether the reclassification would revolutionize how cannabis companies handle their finances.

Batchell was cautious, noting that direct impacts would most likely arise if cannabis is moved away from the stringent effects of IRS Section 280, a provision that has substantially hampered the regulated cannabis industry's profitability.

Batchell pointed out, "It's just hard to understand a scenario where a company is not allowed to take traditional business expense deductions." He believes that a rescheduling would significantly change this landscape, especially from a cash flow perspective.

With a background spanning a decade in regulated cannabis, Batchell's insights are invaluable. When asked about the pathway to legalization, he explained, "Change happens incrementally. Wholesale change usually sees a state develop a compliance-focused medical program first."

Bry brought up the perception of cannabis, noting that many feel classification has long been incongruent with its actual impacts. Batchell responded, "Everybody has opinions... I don't know that it would be based on science, and I don't know that it would be based on real-life impacts." He believes this is a step forward for everyone affected by cannabis laws.

Anticipating the next moves, Batchell predicts the DEA's alignment with the Department Of Health & Human Services' recommendation will be the next "domino to fall." It's a multi-step process that historically sees the DEA agreeing with HHS. "This is a very important step. It's a big step," Batchell emphasized, shedding light on the swift progress being made at the federal level.

Related Content: HHS Secretary Confirms It Is Recommending Cannabis Be Rescheduled, Per Biden's Directive

As the Benzinga Cannabis Capital Conference returns to Chicago on September 27 and 28, it promises further dialogues that focus on policy, equity, and the wider implications of cannabis's potential reclassification. All information is available at bzcannabis.com

Image by Benzinga