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MINNEAPOLIS — The U.S. Department of Justice recently proposed a rule that would shift marijuana from a Schedule I to a Schedule III drug classification, a significant change in federal policy that could impact cannabis businesses in states that have legalized it for recreational use.

The update would not make marijuana legal nationwide, but it would ease restrictions on it and remove a big tax penalty known as 280E , cannabis experts say, just as Minnesota readies to launch its legal market next year . That tax provision currently prevents cannabis companies from writing off otherwise typical business expenses, like rent for the property, utilities and employee salaries. "It will save most cannabis businesses probably between — depending on if they're retail versus wholesale versus cultivation — anywhere from about 40% to 70% in taxes," said Nikki Rohloff, managing partner at Rohloff Associates and Canopy Accounting, which specializes in advising clients in the cannabis industry.



"So it's a huge tax savings for them. It's a huge way for them to then be able to invest back in their companies and grow and ultimately to put money back in the communities." As a Schedule I drug, marijuana is on par with heroin and illicit fentanyl, while Schedule III substances are defined as having a "moderate to low potential for physician and psychological dependence," according to the Drug Enforcement Administration .

Some drugs in that category include ketamine and anabolic steroids. J.

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