Green Thumb's financial strength could outweigh Washington's regulatory delays.
Green Thumb's financial strength could outweigh Washington's regulatory delays.
Marijuana rescheduling was supposed to give U.S. cannabis companies some much-needed relief. Instead, another regulatory dispute threatens to drag out a process that's already taken years.
The latest complication involves a Government Accountability Office report examining how federal agencies evaluate controlled substances. Opponents of marijuana rescheduling want the report added to the administrative record, along with additional testimony and access to documents.
The DEA has indicated it doesn't object to including the report. But the additional requests could delay a final decision on moving marijuana from Schedule I to Schedule III.
For Green Thumb Industries (GTBIF -4.23%), the timing is frustrating, as rescheduling could eliminate a major federal tax burden and allow the company to keep more of the money it earns. That said, there's a stronger argument for owning Green Thumb than betting on what happens in Washington.
The tax situation could change dramatically
Cannabis companies face an unusual disadvantage under Section 280E of the federal tax code. Because marijuana remains a Schedule I substance for much of the industry, businesses generally cannot deduct ordinary operating expenses such as employee salaries, rent, and advertising when calculating federal taxable income. Moving marijuana to Schedule III would eliminate that restriction for qualifying activities.
Green Thumb could benefit substantially, though the exact savings would depend on the final rules and how they're implemented. Until then, the company must continue operating under a tax structure that most other businesses don't face.
But even with that disadvantage, Green Thumb still generated $29 million in operating cash flow during Q2 2026. Revenue reached $306.7 million, while normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $84.3 million. The company also reported $4.9 million in net income. Those results provide a useful glimpse of what Green Thumb is capable of, even in the absence of any broader federal tax relief.
The stock doesn't require a rescheduling victory
Averytin News Financial update.