Under rescheduling, cannabis companies themselves would be freed from a tax burden, the onerous 280E, that has not allowed them to write off everyday business expenses. (For the first time, for instance, canna brands will be able to deduct rent, salaries, insurance and marketing costs).
Cannatech firm Surfside predicts “a 35% to 80% increase in advertising investments” in a post-280E world. Brands and retailers are already calculating the difference between then and now, planning to amp up their paid media.
“The removal of 280E would increase our net revenue after taxes by about 25%,” per Paul Lepore, president of Happy Days dispensary on Long Island, N.Y. “This higher net revenue number, commingled with the ability to write off marketing expenses, would be enough persuasion to increase our marketing budget by about 200%.”
Rescheduling could “open seven to eight figures in annual impact,” according to Courtney Zalewski, chief brand officer and CMO at California-based dispensary chain Embarc.
“We don’t know yet if this will open traditional channels and ease advertising restrictions, or how creative and marketing departments grow as a result,” Zalewski told ADWEEK. “Our hope is that it will allow a new level of maturity and sophistication we have yet to see in cannabis marketing.”
