Marijuana companies would be "treated like normal businesses," if the oppressive restrictions of Section 280E of the Internal Revenue Code, which prevents cannabis businesses from deducting typical business expenses, go away.

That's according to Darren Weiss, president of Verano Holdings Corp. (Cboe CA: VRNO) VRNOF, who joined three other industry experts at the Benzinga Cannabis Capital Conference in Chicago on Tuesday for the panel, “Life After 280E, Different Companies, Different Scenarios: More Money For All?”

Without paying 280E taxes, companies such as Verano with active operations spanning 14 U.S. states, would have additional dollars to direct toward research and development efforts.

Having extra cash is an "opportunity to engage in more sort of hard science R&D which is not been the bulwark of this industry," Weiss told the crowd at the Marriott Magnificent Mile. He added that single-state operators would also be able to do business successfully and "survive."

Laurie Holcomb, CEO of Gold Flora Corp GRAM; Mackenzie Peterson, vice president of marketing at AdvisorShares Pure US Cannabis ETF MSOS and Peter Sack, managing partner at Chicago Atlantic Real Estate Finance Inc REFI, also participated in the panel with Weiss. David Feuerstein, co-founder and partner at Feuerstein Kulick, moderated.

In the long run, having more money on their balance sheets without the complexity imposed by 280E would make cannabis businesses more attractive to potential investors, AdvisorShares' Peterson said. Operating like a normal business would make investors see a cannabis company as an opportunity.

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280E Going Away Is Paired With Rescheduling

"Companies will benefit just by having more money on their balance sheets that can go into a ton of different places," Peterson said referring to 280E going away, a milestone that will "be paired with rescheduling."

But, cannabis rescheduling — a topic widely discussed and addressed for years — is not plausible in 2024, according to Peterson, even though both of the presidential picks for the November elections seem to be at least pro-cannabis.

Chicago Atlantic's Sack, who manages a lending company to the cannabis industry and has deployed close to two billion dollars, called former President Donald Trump‘s endorsement of rescheduling "a major milestone." Having the Republican candidate endorsing rescheduling changes the dynamic in the conversation from "if" to "when" it will happen, he added.

Sack said the policy change around cannabis alongside 280E going away would make companies like his "more willing to provide capital to the industry."

"I think it’s an incremental puzzle piece leading to what I think will be really transformational of uplifting," Sack continued.

Gold Flora's Holcomb agrees. Cannabis policy change would also help crack down on illicit sales, she explained, referring to the burning issue in California.

Having more money in the legal market and not being subject to the tax structure that includes local and state taxes in addition to 280E, would allow operators to offer pricing to consumers at the same price as illicit operators.

She added the price will change once California sees more legal stores open. "We only have about a thousand, we need three thousand, so it starts with that," Holcomb said.

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Photo: Benzinga Cannabis Conference 2024, “Life After 280E, Different Companies, Different Scenarios: More Money For All?”, Photo by Wendy Davis.