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Schedule III
·
Final Order
·
DOJ
The IRS owes
your cannabis
business money.
We get it back.
Federal rescheduling of medical cannabis to Schedule III eliminates 280E — and opens the door to refund claims on taxes overpaid under an unjust provision. The window is open. It will not stay that way.
Two tax realities.
One order changed everything.
Four steps from
overpaid to refunded.
We handle the technical and legal complexity. You provide documents. We do the math and file.
Who qualifies
for retrospective relief.
The DOJ Final Order creates a clear eligibility boundary. Medical operators are in. Adult-use only operations are not — yet.
- State-licensed medical marijuana dispensary or cultivator
- Filed federal tax returns under 280E in 2022, 2023, or 2024
- Paid federal income tax on revenue (not carrying NOLs only)
- Separate or segregable medical / adult-use lines of business
- CFO or tax-responsible officer can authorize amended return filing
- Adult-use only operators (pending June 29 hearing)
- Unlicensed operations — federal exposure remains Schedule I
- Operators with zero federal tax liability in lookback period
If you operate both medical and adult-use under one entity, your situation is more complex — but not disqualifying. Expense segregation and entity-level apportionment strategies can isolate the medical component for 280E relief. We've structured these before.
The DOJ order encourages Treasury to consider retroactive relief — it does not mandate it. Amended return positions require a tax opinion establishing "reasonable basis." Protective claims carry lower exposure but do not guarantee a refund. All strategies are deployed with counsel engaged.
What a $3M revenue
dispensary recovers.
Illustrative example — actual recovery depends on expense structure, COGS treatment, and years open.
| Line Item | Under 280E (Prior) | Post-Rescheduling | Annual Delta |
|---|---|---|---|
| Revenue | $3,000,000 | $3,000,000 | — |
| Cost of Goods Sold | $1,200,000 | $1,200,000 | — |
| Gross Profit | $1,800,000 | $1,800,000 | — |
| Operating Expenses (deductible) | $0 disallowed | ($900,000) | +$900,000 |
| Taxable Income | $1,800,000 | $900,000 | −$900,000 |
| Federal Tax (21%) | $378,000 | $189,000 | −$189,000/yr |
| 3-Year Lookback Recovery | $1,134,000 paid | $567,000 owed | ~$567,000 |
* Interest on overpayments accrues at the federal short-term rate + 3%. That adds to your recovery.
* Protective claims preserve your position without triggering an immediate audit.
The risks.
Stated plainly.
The order may face litigation
Acting AG Blanche used treaty authority rather than standard rulemaking. Legal challenges could delay or narrow the order. Protective claims are low-exposure hedges until the dust settles.
Treasury hasn't confirmed retroactivity
The order encourages Treasury to consider lookback relief — it doesn't mandate it. IRS transition rules may limit refunds to 2026 forward. We file now to preserve optionality.
Recreational operations still in Schedule I
Only state-licensed medical cannabis qualifies today. Adult-use relief is contingent on the June 29 DEA hearing outcome and subsequent rulemaking — potentially late 2026 or beyond.
Amended returns invite scrutiny
Filing amended returns opens the year to IRS review. We mitigate this with proper substantiation, a tax opinion, and a protective claim structure that minimizes your downside surface.
Your window to recover
overpaid federal taxes
is open now.
No retainer to start. We qualify your operation, run the lookback analysis, and only engage on a fee-on-recovery basis if there's a case worth filing.
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