Marijuana stocks have found new momentum ahead of the holidays. Thanks to the incoming Biden Administration, it looks like cannabis is finally ready to have its big moment in the United States. As veteran marijuana stock traders know, the Canadian recreational market simply hasn’t been large enough to support the ambitions of all the cannabis companies. However, the U.S. coming online will be a complete game-changer.
That’s why recent events are so exciting. The House of Representatives is set to approve federal level marijuana legalization. It seems that the Senate will block the bill, so — for now — this is as much a gesture as anything. However, with the Senate potentially swinging to the Democrats in January the path for legalization could become clearer. Legalization, or even more modest actions, such as the Safe Banking Act, could make the cannabis business far more lucrative.
There’s another potentially momentous opportunity here. Currently, U.S. marijuana companies face onerous taxation due to a provision called 280E. This is a piece of Internal Revenue Service (IRS) tax code. It stems back to a 1981 court case and ended up setting precedent that individuals and companies cannot deduct business expenses if they engage in prohibited business activity. While this was clearly targeted at hard drug dealers, it has now caused marijuana companies to pay crippling…
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