Tesla Investor Ross Gerber Calls On DEA To Reschedule Cannabis: 'Absurd We're Still Waiting'

It wasn’t long ago when Ross Gerber, president and CEO of Gerber Kawasaki Wealth and Investment Management and an enthusiastic Tesla Inc TSLA investor, said that the nine things he focuses on in his investment decisions included “things that used to be illegal,” one of which is cannabis.  

Since Gerber made that remark nearly two years ago, cannabis has become legalized in the vast majority of the country as Ohio became the 24th state to approve adult-use marijuana in November joining 38 others with legal medical marijuana. 

Bullish On Cannabis Stocks

Gerber said at the time that he was “super bullish” on cannabis stocks. “Sales are through the roof," he said. "They’ve already built an amazing industry, whether it’s Green Thumb GTBIF or TerrAscend TRSSF or Trulieve TCNNF in Florida. These are great businesses with great CEOs making tons of cash flow.” 

He's Got That Right

Now, two years later, a recent report by Zuanic & Associates highlighted both EBITDA and market cap upside of two of the three companies Gerber mentioned: Green Thumb, a leader in EBITDA Upside ($2,160M) and Trulieve with a market cap increase of over 150%. 

They’re still making “tons of cash flow” despite the onerous IRS tax code 280E that obliges cannabis companies to pay income tax on gross profits. The repeal of 280E could dramatically lower effective tax rates from over 70% to around 21%.

What’s To Be Done? 

If you said reschedule cannabis from Schedule 1 to Schedule 3, go to the head of the class. We are all waiting for that to happen, especially following an August recommendation from the Dept of Health and Human Services to the DEA to lighten up on cannabis. 

Ross Gerber, in a recent Tweet on X, has joined the chorus, calling it absurd that we're still waiting for cannabis rescheduling. 

He's got that right, too.

It’s beyond absurd we are still waiting for rescheduling of cannabis from schedule 1. This should be obvious for the DEA, however giving up decades of oppression is hard… #legalization

— Ross Gerber (@GerberKawasaki) December 27, 2023

Photo from Benzinga Power Hour