The reclassification of cannabis to Schedule III is approaching, a shift that could remove the 280E tax burden for U.S. operators. Green Thumb Industries and Tilray are positioned to benefit from the regulatory change, according to a June 7 analysis.
The reclassification of cannabis to Schedule III is approaching, a regulatory shift that could remove the 280E tax burden for U.S. operators.
"The partial rescheduling order is extremely favorable for cannabis operators," Roth Capital analysts said after upgrading Tilray Brands.
The global cannabidiol oil market was valued at $4.4 billion in 2025 and is projected to reach $8.3 billion by 2033, expanding at a 7.9% compound annual growth rate, according to Grand View Research. North America accounted for 65.9% of global revenue in 2025. Hemp-derived CBD oil led by source, while full-spectrum formulations dominated by product type.
The rescheduling would allow U.S. cannabis operators to deduct ordinary business expenses, a change that could improve margins by removing a tax burden that has weighed on profitability since the industry's inception.
Tilray has been expanding internationally ahead of the shift. Its German partnership, effective April 1, covers roughly 3,600 member pharmacies. In Australia, the company announced its largest medical cannabis portfolio expansion. In Canada, it launched PORTAL, a brand targeting high-tolerance consumers with high-potency liquid diamond vapes and infused pre-rolls.
Analyst views on Tilray remain divided. Roth Capital upgraded the stock. Canaccord Genuity reduced its price target by about C$3.50, citing execution and profitability concerns. Alliance Global and TD Cowen each cut their U.S. dollar price targets by roughly $2 to $3 per share, balancing rescheduling benefits against ongoing margin challenges.
Green Thumb Industries, a U.S.-focused operator, stands to benefit directly from the removal of 280E, which currently taxes cannabis businesses on gross receipts rather than net income. The company operates retail dispensaries and manufacturing facilities across multiple states.
The broader wellness market provides a tailwind. Consumer preference for plant-based wellness solutions is rising, with CBD products expanding into supplements, cosmetics, and beverages. E-commerce has become the fastest-growing distribution channel, enabling brands to reach consumers directly.
The rescheduling represents the most significant regulatory catalyst for U.S. cannabis operators since legalization began. Investors will watch for updates from the Drug Enforcement Administration on the implementation timeline.
This article is for informational purposes only and does not constitute investment advice.
