LAS VEGAS – Conference organizers love inserting a pithy catchphrase like “dare to grow” to curate an event’s atmosphere, but palpable optimism that the end of Internal Revenue Code Section 280E is in sight emerged as the true theme throughout MJBizCon 2023’s educational sessions, state of the industry keynote, and show-floor conversations.
The industry will surely remember 2023 as a year survived—a period when high interest rates and steep inflation created the type of challenging economic conditions that keep investors at bay. But 2023 could be the spark that ignites real change if cannabis is reclassified from Schedule I to a less restrictive Schedule III under the Controlled Substances Act (CSA).
As a Schedule III substance, cannabis would no longer suffer the asphyxiating effects of Internal Revenue Code Section 280E. The tax code disallows the deduction of any expenses incurred “in carrying on any trade or business if such trade or business consists of trafficking in” substances on Schedule I or II of the CSA. According to financial analysts at Viridian Capital Advisors, the twelve largest operators in the cannabis industry would save a combined total of $700 million annually without 280E—a sea change drawing interest from investors and optimism from operators in every corner of cannabis.
“This was a tough year in the cannabis industry,” said Lisa Buffo, founder and chief executive officer at the Cannabis Marketing Association. Buffo may have kicked off the week’s pre-show marketing forum with somber camaraderie, but she set the tone with her first tip for the future: Prepare for the end of 280E now.
Predicting the end of 280E
Buffo cited data from the Federal Register and Alliance Global Partners that she said indicates the DEA could make a rescheduling determination by July 2—exactly 308 days from the rescheduling recommendation by HHS.
Hope may have attracted investors, but determining the outcome of a major tax change in the middle of the year is best left to the certified public accountants. Mark Waller, co-founder and managing partner at Morem & Waller, an accounting firm that specializes in cannabis, explained how lifting 280E restrictions could affect quarterly and annual business taxes in 2024.
“The short answer is, it depends,” he said. “Cannabis companies that have been tracking nondeductible expenses in an accurate and well-recorded manner may have a huge opportunity to amend returns or file new returns that would essentially allow them to deduct the expenses they were not allowed to deduct due to 280E, which could have a flow-through effect on quarterly tax liabilities going forward — at least on a temporary basis. Big picture: Any reduction in taxable income will help reduce taxes paid to federal and state tax authorities, easing the tax burden overall.”
While marketers with meager budgets count down the days until July, Buffo recommends keeping an eye on America’s corporate marketing strategies to learn from the best funded and most successful brands that aim higher than a simple return on investment (ROI).
The recent McDonald’s x Crocs brand mash-up is one case study presented as a major success across multiple fronts: creating a new revenue stream for McDonald’s, bringing the brand’s personality to life in a tangible product, providing a way for customers to show their brand loyalty, and turning customers into walking billboards. To achieve success in 2024, markers and brands should consider a potential array of benefits instead of focusing strictly on the ROI.
Stepping away from the show
While the early week’s sessions were memorable, many of MJBizCon’s best moments take place away from the bustling expo floor and packed speaker halls. One of the highlights of Cannabis Week for many of the industry’s women (and their allies) is the annual Blunt Brunch. Hosted at the IPEC, the gathering of more than 350 people is a jubilant affair mixing education, networking, and, of course, brunch.
The energy in the room was exuberant as emcee MsKindness Ramierez led a “blunt conversation” about how to embrace change. Event co-founders Adelia Carrillo and Parisa Rad spoke about their humble beginnings, bringing a meeting of eight women to one of the most sought-after tickets of MJBiz week. After the formal program, the guests were led to the downstairs foyer where several booths and a well-appointed bar were primed for perusal.
“I’ve been coming to Blunt Brunch since the first in 2021,” said Women in Cannabis Study partner Rachelle Gordon. “It’s been incredible to see the event grow and to witness women building community with their peers.”
Several attendees shared that Blunt Brunch is the best part of Cannabis Week and a wonderful way to kick off the festivities. Designed to empower women and create space for impactful dialogue, the event continues to grow each year.
2023 Emjay international cannabis awards
Sales, marketing, and leadership teams may have different definitions for success when looking back at their big week in Las Vegas, but a consensus vote from one’s peers and an internal committee of industry professionals tends to meet the mark for everyone. The inaugural Emjays featured twenty-four categories spanning everything from social content creators and podcasts to financial institutions and packaging companies. Throughout the week, nominated exhibitors pushed booth visitors for last-minute votes in hopes of earning a coveted award and recognition as one of the year’s most popular brands.
The 2023 Emjay winners were:
- Accounting Firm of the Year: Citrin Cooperman
- Advocacy Group of the Year: Last Prisoner Project
- Apparel / Lifestyle Brand of the Year: Jeeter
- Branding / Marketing Agency of the Year: PufCreativ
- Business Software of the Year: Jane Technologies
- Cannabis Business Insurance of the Year: HUB International
- Cannabis Consulting Firm of the Year: Sapphire Risk Advisory Group
- Cannabis Friendly Bank of the Year: Dama Financial
- Cannabis Law Firm of the Year: Clark Hill Law Firm
- Cannabis Podcast of the Year: MITA Unshackled
- Cannabis Training / Education Services of the Year: Green Flower
- Consumer Gear / Tech Product of the Year: Flower Mill Grinder
- Investment Firm of the Year: Merida Capital Holdings
- Lighting Company of the Year: Fluence
- Market Research / Data Firm of the Year: Cannabiz Media
- Packaging Company of the Year: Grove Bags
- Public Relations Agency of the Year: Grasslands
- Retail POS System of the Year: Dutchie
- Seed Bank of the Year: Royal Queen Seeds
- Social Content Creator of the Year: Roger Volodarsky
- Staffing & Recruiting Agency of the Year: Vangst
- Testing Lab of the Year: SC Labs
- Trade Association of the Year: Minority Cannabis Business Association
- Vaporizer Hardware Brand of the Year: Puffco