Trulieve and Curaleaf shares surge over 50% in three months following tax rule changes for cannabis companies.
U.S. cannabis stocks climbed after the Drug Enforcement Administration reclassified marijuana from Schedule I to Schedule III, lifting tax restrictions under IRS code 280E. The change allows companies to deduct business expenses, improving profitability for medical marijuana firms initially, with hearings set for June 29 on broader rescheduling including recreational use.
Trulieve and Curaleaf led gains, with shares rising more than 50% in the past three months. Trulieve, the largest multi-state operator with over 240 dispensaries, reported renewed profitability and filed amended tax returns for 2019-2021, claiming $143 million in deductions. The tax benefits from rescheduling remain underutilized, according to company executives.
The rescheduling marks a pivotal shift for the industry, though full implementation and regulatory clarity are pending. Market reaction has been positive, reflecting investor optimism about long-term growth and reduced tax burdens.