2024 was a primarily lean and flat year for the U.S. cannabis industry. The state-legal cannabis industry has been volatile from its inception, and 2024 represented a year of winnowing with many cannabis businesses failing. 2025 has some light on the horizon, though, with the prospect of the Drug Enforcement Administration’s (“DEA”) rescheduling of cannabis from Schedule I to Schedule III. Until that occurs though, you can expect that cannabis in 2025 will be just as rocky as in 2024. Rocky doesn’t mean unsuccessful though. There are still opportunities across the board for investors and business operators, from state-by-state expansion to purchasing cannabis assets for pennies on the dollar in some cases.

We are all aware that a state-legal marijuana business is illegal under federal law and cannabis businesses deal with this dichotomy between state and federal law on a daily basis. Unfortunately, the fact that a cannabis business is federally illegal does not alleviate the obligation to pay federal income tax because the tax code does