The DEA's expedited administrative hearing on moving cannabis from Schedule I to Schedule III began June 29, 2026, with a conclusion targeted for mid-July, a move that would eliminate the Section 280E tax burden that forces U.S. cannabis operators to pay effective tax rates above 70%. The AdvisorShares Pure US Cannabis ETF has rallied 99.2% over the trailing year on rescheduling hopes but remains 81% below its September 2020 launch price. Prediction markets, however, price just an 18.5% probability of rescheduling by the end of July and 23.3% by year-end, with a contract for rescheduling by March 31 having already expired worthless. Canadian licensed producers Tilray Brands and Canopy Growth, which are not subject to 280E, have seen their shares fall 97.5% and 99.6% respectively from their peaks, mirroring the boom-and-bust pattern of prior reform cycles. For U.S. multi-state operators held in the AdvisorShares fund, 280E relief would be a structural unlock, shifting cash flows from the IRS to the income statement and narrowing the capital-raising discount, but timing has repeatedly destroyed capital in the sector.
Canopy Growth CorpCanadian LPs not subject to 280E; mentioned as comparison for boom-and-bust pattern
Tilray IncCanadian LPs not subject to 280E; mentioned as comparison for boom-and-bust pattern