While headlines may make this sound like a major legalization milestone, the reality is more nuanced; and for business owners, especially in the cannabis space, understanding the distinction is critical.

What Does “Rescheduling” Mean?

For decades, cannabis has been classified as a Schedule I drug, alongside substances like heroin, meaning it was considered to have no accepted medical use and a high potential for abuse.

Moving cannabis to Schedule III signals something significant:

• The federal government now recognizes medical value
• It is considered lower risk than previously classified

Rescheduling changes classification, not legality.

Cannabis would still be federally controlled, just under a less restrictive category.

Why This Matters for Cannabis Businesses

This shift could have meaningful financial and operational impacts, even without legalization.

1. Major Tax Relief

Cannabis businesses have long been subject to IRS Code Section 280E, which prevents standard business deductions.

Rescheduling could eliminate that burden, allowing companies to deduct expenses like rent, payroll, and marketing, dramatically improving profitability.

2. Improved Research Opportunities

Schedule III status would make it easier for researchers to study cannabis, reducing regulatory barriers and expanding access to clinical data.

This could accelerate:

• Medical applications
• FDA-approved cannabis-based treatments
• Industry credibility

3. Better Access to Capital, But Not a Banking Fix

While rescheduling may reduce perceived risk for financial institutions, it does not guarantee full banking access.

Cannabis businesses could see gradual improvements in lending and investment, but major banking reform still requires separate legislation.

What Rescheduling Does Not Do

This is where confusion, and risk, often comes in.

Even under Schedule III:

• Cannabis is still federally illegal
• Interstate sales remain prohibited
• Dispensaries are not federally recognized businesses
• Products are not automatically FDA-approved
• State and federal law conflicts remain

Your day-to-day operations likely won’t change overnight.

Why This Isn’t Legalization

Legalization would mean:

• Federal legality across all states
• Interstate commerce
• Standardized regulation
• Broad access to banking and financial systems

Rescheduling does none of that.

Instead, it’s best understood as a transitional step, one that signals progress but stops short of full reform.

What Business Owners Should Do Now

If you’re in or adjacent to the cannabis industry, this is a moment to prepare, not assume.

Consider:

• Reviewing your tax strategy for potential 280E changes
• Monitoring regulatory updates closely
• Evaluating growth or reinvestment opportunities
• Staying compliant with both state and federal frameworks

The Bottom Line

Cannabis rescheduling is one of the most significant federal policy shifts in decades, but it’s not legalization.

For businesses, the opportunity lies in what it unlocks behind the scenes: tax relief, research expansion, and future reform momentum.

But for now, compliance, strategy, and clarity still matter more than ever.

More Resources:

• How do I find an accountant who works with cannabis clients? [VIDEO]
• Cannabis Industry Tax Services from Alloy Silverstein
• Alloy Silverstein: Cannabis Industry Services [PDF]
• More from Alloy Silverstein on Cannabis →

The post What Does Cannabis Rescheduling to Schedule III Mean for Businesses? appeared first on Alloy Silverstein.

Who’s Eligible?

To qualify for the CBD Grant Program, applicants must:

• Hold a valid and current NJ Cannabis Regulatory Commission (NJCRC) annual license and digital card.

• Be operating—or close to launching—a business in one of the following categories:

  • Class 1: Cultivator

  • Class 2: Manufacturer

  • Class 5: Retailer

  • Testing Laboratory

To promote equity in cannabis business development, the program excludes:

• Multi-State Operators (MSOs)

• Transitional Alternative Treatment Centers (ATCs)

• Any applicants who previously received funding from NJEDA’s Joint Ventures or Seed Equity Grant programs.

“Centering equity in cannabis economic development means ensuring that capital flows to the local entrepreneurs who need it most,” said Tai Cooper, NJEDA’s Chief Community Development Officer. “By excluding MSOs and ATCs, this program prioritizes small, independent operators who are investing in New Jersey’s future — creating jobs, generating local wealth, and laying the groundwork for a more inclusive and competitive industry statewide.”

Stay Informed

More details about the Cannabis Business Development Grant Program will be released in the coming weeks. Interested entrepreneurs and stakeholders are encouraged to visit NJEDA’s website and follow NJEDA on social media for the latest updates.

Further Reading:

• NJ Cannabis: Social Equity Excise Fee Increases for 2025
• How do I find an accountant who works with cannabis clients? [VIDEO]
• New Jersey Economic Development Authority: Grants and Loans for New Jersey Businesses [WEBINAR]
• Understanding Energy-Efficient Home Tax Credits: What Homeowners Need to Know [VIDEO]

The post NJEDA Launches $5 Million Cannabis Grant Program to Support Small Businesses appeared first on Alloy Silverstein.

Here are 5 questions you should be asking a prospective CPA or tax advisor before hiring them.

1. Do you work with others in the cannabis industry?

The cannabis market has very unique challenges and compliance requirements, so a provider should be experienced and well-versed. Ask if they’ve worked with other business owners, what associations they participate in, and get a good feel if they have actual experience that would benefit your business. Don’t be shy in asking for references.

2. How familiar are you with IRS 280 E, and what expenses are deductible?

At the federal level, this section of the tax code severely limits business deductions which, as many business owners are aware, can strongly impact profitability. This requires strategic tax planning and navigation. Back in 2023, New Jersey actually decoupled marijuana businesses from 280E at the state tax provision level, so licensed New Jersey cannabis businesses are allowed to take both their cost of goods sold and operating expenses as full deductions on their state income tax returns. A good CPA will offer strategies that help you manage tax liabilities effectively, even with the restrictions imposed on cannabis businesses.

3. How do you stay updated on changes and best practices within the cannabis industry?

The laws and regulations are constantly changing so you want to be sure your CPA is proactive about staying informed at the state and federal levels. Are they active in cannabis organizations? are they pursuing CPE in that area? are they communicating updates with their clients? do they have relationships within the industry that can help set you up for success? You want to feel confident that you’re in good, knowledgeable hands.

4. Can you provide more than just tax preparation and filing?

Being in a nuanced industry should require tax planning throughout the year, not just seeing your CPA during tax season. A CPA and advisor should be able to discuss a plan with you to ensure your entity setups, tax planning, compliance, bookkeeping, and payroll are all appropriately covered. You can take it a step further and ask about reporting, forecasting, and even more growth guidance. Your accountant should not only help you stay compliant but also help you plan for business expansion and changes down the line in the legal landscape.

5. Last, don’t forget to check with the CPA on what accounting software they recommend.

A cannabis CPA that has worked with other dispensaries can make recommendations based on what has or hasn’t worked well for other businesses. If you are new to running a business in general, your CPA can set you up with accounting software that will help organize and streamline your company’s accounting. You want to make sure your professional advisors are familiar with the software and can support you when you have questions or concerns.

By asking these questions, you’ll be better positioned to choose a CPA who can guide your dispensary or marijuana business through the complexities of tax compliance, ensure financial health, and minimize risks associated with the cannabis industry.

Additional NJ Cannabis Business Resources:

• Ren Cicalese III to Speak at CCSNJ Cannabis Workshop – February 26, 2025→
• Alloy Silverstein: Cannabis Industry Services [PDF] →
• New Jersey Officially Decouples Marijuana Businesses from IRS 280E→
• From Seed to Sale: The Growing NJ Market for Cannabis→
• Marijuana: A High Point for the IRS→
• NJ Cannabis: Social Equity Excise Fee Increases for 2025→
• Payroll & HR Solutions for Dispensaries and Cannabis Businesses→
• More Alloy Silverstein coverage on cannabis→

The post How do I find an accountant who works with cannabis clients? [VIDEO] appeared first on Alloy Silverstein.

Class 1 license holders must file a monthly tax return, the SF-100, to report the total ounces sold or transferred and to pay the NJ Social Equity Excise Fee (SEEF). The monthly Form SF-100 and fee payment are due by 11:59 p.m. on the 20th day of the month after the end of the filing period, and must be filed even if no sales or transfers of usable cannabis occur.

To learn more about other cannabis taxes and fees in New Jersey, check out Cannabis Taxes in New Jersey or visit our Cannabis Playlist on our YouTube channel.

Alloy Silverstein’s Ren Cicalese III discusses the cannabis taxes and fees in New Jersey that every cannabis business owner should be aware of.

 
 
Additional Resources:

• State Tax Break for Cannabis: New Jersey Officially Decouples Marijuana Businesses from IRS 280E
• New Jersey Activates Application Period for 3 More Cannabis Business Licenses
• A Comprehensive Update on The Business of Cannabis in South Jersey
• Social Equity Excise Fee Update for 2024

The post NJ Cannabis: Social Equity Excise Fee Increases for 2025 appeared first on Alloy Silverstein.

This adjustment is down from $1.52 per ounce in 2023. The SEEF is due on each usable ounce of recreational cannabis sold by a Class 1 (Cannabis Cultivator) license holder.

Class 1 license holders must file a monthly tax return, the SF-100, to report the total ounces of cannabis sold or transferred and to pay the SEEF. The SEEF is imposed at the rate of 1/3 of 1% of the statewide average retail price of an ounce of usable cannabis for consumer purchase, as determined by the New Jersey Cannabis Regulatory Commission (CRC).

Medical cannabis is not subject to SEEF and should not be reported on Form SF-100. However, an alternative treatment center (ATC) that has a Class 1 Cannabis Cultivator license for recreational cannabis sales must still file and pay the SEEF on the usable ounces sold to the recreational market. The monthly form must be completed and filed even if no sales or transfers of usable cannabis occur.

The Social Equity Excise Fee is also not applicable to the transfer of cannabis from a cannabis to cultivator from another cannabis cultivator.

The SF-100 form, by 11:59 pm on the 20th day of the month after the end of the filing period.

To learn more about other cannabis taxes and fees in New Jersey, check out Cannabis Taxes in New Jersey or visit our Cannabis Playlist on our YouTube channel.

Alloy Silverstein’s Ren Cicalese III discusses the cannabis taxes and fees in New Jersey that every cannabis business owner should be aware of.

Read More:

• Recreational Cannabis in New Jersey Update

• NJ Cannabis and the Social Equity Excise Fee

• Defining 280E for Cannabis Businesses in New Jersey

The post NJ Cannabis: Social Equity Excise Fee Decreases for 2024 appeared first on Alloy Silverstein.

License Class Types for NJ Cannabis Businesses

The CREAMM Act (New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act) of 2021 established six classes of business licenses for the recreational cannabis market.

1. Class 1 – Cultivator
2. Class 2 – Manufacturer
3. Class 3 – Wholesaler
4. Class 4 – Distributor
5. Class 5 – Retailer
6. Class 6 – Delivery

The license application process opened for New Jersey Cultivators and Manufacturers in December 2021, while Retail followed suit in March 2022. The NJ Cannabis Regulatory Commission (NJ-CRC) announced that, as of September 27, 2023, applications will finally be accepted for the final three classes: Wholesaler, Distributor, and Delivery.

According to the NJ-CRC on NJ.gov:

Recreational cannabis businesses may integrate vertically. Vertical integration allows operators to hold any combination of a cultivator license, a manufacturer license, a retailer license, and a delivery service license simultaneously or hold a wholesale and a distributor license simultaneously. All recreational license holders can have only one business in each class. There is no established limit on the number of cannabis business licenses available statewide.

License Type

As with the original classes, entrepreneurs in these three new classes have the option to file for a conditional or an annual license. A conditional license grants the entrepreneur 120 days to build out the business, seek approvals, and convert to an annual license. Applicants also select if they will pursue a standard business or a microbusiness license. Microbusinesses in the New Jersey cannabis market must have no more than 10 employees and have a physical plant that is less than 2,500 square feet. License applications will be accepted and reviewed on a rolling basis, until indicated otherwise.

When to Apply for Wholesale, Distribution, or Delivery Licenses

While the application period opens on September 27, the first 90 days are reserved for Social Equity Businesses. Beginning December 27, applications will be accepted from diversely-owned businesses, and the remainder of applications can submit their applications beginning March 27, 2024.

Schedule of Application Start Dates:

• September 27, 2023 – Social Equity Businesses
• December 27, 2023 – Diversely-Owned Businesses
• March 27, 2024 – All Businesses

Read FAQs and more details from the NJ-CRC at nj.gov/cannabis.

Consult with a Cannabis Tax Expert

Running a cannabis business in the state of New Jersey can be uniquely challenging. It is important to have a trusted and knowledgeable CPA by your side to guide you. Don’t hesitate to contact an Alloy Silverstein advisor today.

Additional Cannabis Tax & Accounting Resources:

• From Seed to Sale: The Growing NJ Market for Cannabis
• State Tax Break for Cannabis: New Jersey Officially Decouples Marijuana Businesses from IRS 280E
• NJBAC Cannabis Training Academy
• Cannabis Taxes in New Jersey
• Social Equity Excise Fee Update for NJ Cannabis as of 2023
• NJ Cannabis and the Social Equity Excise Fee
• Marijuana: A High Point for the IRS
• A Comprehensive Update on The Business of Cannabis in South Jersey

The post New Jersey Activates Application Period for 3 More Cannabis Business Licenses appeared first on Alloy Silverstein.

Introducing the NJ Cannabis Training Academy

While the cannabis industry continues to grow, many are feeling the pressure when it comes to applying for a recreational cannabis license and actually starting a business. The New Jersey Business Action Center has been designated by the New Jersey Cannabis Regulatory Commission (NJ-CRC) to provide technical assistance and training to these applicants.  This program is paid for by the taxes paid on cannabis sales and its primary purpose is to help guide those that are new to the industry.

NJBAC Cannabis Training Academy

Technical Training for New Cannabis Businesses

There has been a huge push for cannabis business licenses, but many are stuck with maneuvering the ins and outs of the application process on their own. This training program will help applicants in the social equity, legacy, Impact Zone, diversely-owned and microbusiness categories get the assistance that they need. This virtual, educational, and on-demand program is available at any time for those who sign up. There is also a live mentoring question and answer session every few weeks that will allow applicants to utilize the resources on their own schedule, but still be able to chat with a mentor in real time when they go live.  The classes will be taught by faculty who are in, have taught, or have consulted in the cannabis industry. Applicants will be able to learn from those with firsthand experience and will also be able to access these industry professionals through the virtual Q&As.

10 Ways to Prepare Your License Application

Partner with a Trustworthy Cannabis Business Advisor

With a new industry, many people are still learning what is to be expected and considered the “norm”. Unfortunately, some will capitalize on the newness and naivety of the new applicants. These resources will help applicants be prepared for what to expect and properly manage their business so they are not taken advantage of in this new process. In addition, this complimentary training program will help these new business owners navigating a new industry to be better prepared and effectively manage their business.

To learn more about the Cannabis Training Academy, its range of resources that are available, or to access more cannabis business resources and speak to an advisor, visit alloysilverstein.com/cannabis today!

The post NJBAC Cannabis Training Academy appeared first on Alloy Silverstein.

New Jersey Cannabis Tax Update – May 2023 [Video]

Summary Provided by Ren Cicalese III, CPA, MST

What is 280E?

Since cannabis remains illegal at the federal level, IRS Section 280E prohibits businesses that sell cannabis and other federally illegal controlled substances from deducting expenses other than cost of goods sold. Having such limitations and not being able to take full deductions results in a much higher taxable income. This emphasizes why proper tax planning and compliance with a knowledgeable CPA is so critical.

What this means for New Jersey Cannabis Businesses and Dispensaries

Under this new state law, licensed New Jersey-based cannabis businesses will now be allowed to take both their cost of goods sold and operating expenses as full deductions on their state income tax returns. As many business owners know, deducting business expenses is a critical aspect of tax planning and can affect profitability.

Written by the New Jersey Society of CPAs (NJCPA) Cannabis Interest Group in an effort to resolve the unfair tax treatment in a state where cannabis is legal, this workaround has been welcomed and applauded by the New Jersey cannabis community. Allowing the opportunity to deduct the ordinary expenses associated with running and operating a business or dispensary, even at just the state level, will financially benefit businesses in this growing industry.

Section 280E still applies at the federal level, meaning for federal tax purposes, cannabis business owners will still be limited to only taking the cost of goods sold as a valid deduction on the federal income tax return. As of this tax year and going forward, that will no longer apply for New Jersey state income tax returns.

The above chart is a generalized example.
Please speak with your accountant and advisor for how it pertains to your specific situation.

Partner with an Experienced Cannabis Tax and Business Advisor

With the constant changes in the cannabis industry, it’s imperative to have a trusted adviser by your side throughout all stages of the business cycle.  From applications to licensing to open and operating, our Cannabis advisors at Alloy Silverstein are here to help you be compliant and grow your business or dispensary. For more information on how this law change applies to you and your marijuana business, reach out to an Alloy Silverstein Advisor today.

Further Reading:

• Defining 280E for Cannabis Businesses in New Jersey
• Cannabis Taxes in New Jersey
• Marijuana: A High Point for the IRS
• From Seed to Sale: The Growing NJ Market for Cannabis
• A Comprehensive Update on The Business of Cannabis in South Jersey
• More Videos on NJ Cannabis Accounting, Tax, and Payroll Advice

The post State Tax Break for Cannabis: New Jersey Officially Decouples Marijuana Businesses from IRS 280E appeared first on Alloy Silverstein.

Medical cannabis is not subject to SEEF and should not be reported on Form SF-100. However, an alternative treatment center (ATC) that has a Class 1 Cannabis Cultivator license for recreational cannabis sales must still file and pay the SEEF on the usable ounces sold to the recreational market. The monthly form must be completed and filed even if no sales or transfers of usable cannabis occur.

The Social Equity Excise Fee is also not applicable to the transfer of cannabis from a cannabis to cultivator from another cannabis cultivator.

The SF-100 form and payment are due by 11:59 pm on the 20th day of the month after the end of the filing period.

To learn more about other cannabis taxes and fees in New Jersey, check out Cannabis Taxes in New Jersey or visit our Cannabis Playlist on our YouTube channel.

Alloy Silverstein’s Ren Cicalese III discusses the cannabis taxes and fees in New Jersey that every cannabis business owner should be aware of.

Read More:

• Recreational Cannabis in New Jersey Update

• NJ Cannabis and the Social Equity Excise Fee

• Defining 280E for Cannabis Businesses in New Jersey

The post Social Equity Excise Fee Update for NJ Cannabis as of 2023 appeared first on Alloy Silverstein.

Update as of May 2023: New Jersey has decoupled from the 280E federal prohibition on business expense deductions.

Since cannabis is still illegal at the federal level, Section 280E prohibits businesses that sell cannabis and other federally illegal controlled substances from deducting expenses other than cost of goods sold. This results in a much higher taxable income, so proper tax planning and compliance with a knowledgeable CPA is critical.

Alloy Silverstein’s Ren Cicalese III discusses the ins and outs of 280E in The Business of Cannabis in South Jersey Panel Discussion.

Access the recording →

Pending Cannabis Updates

New Jersey lawmakers approved a bill that will allow New Jersey Cannabis businesses to claim a state tax deduction as a partial 280E workaround. This bill has passed the New Jersey Assembly, but still must pass the senate and be signed by Governor Murphy before being put into law. If it is approved all the way through Governor Murphy, the bill will allow licensed marijuana businesses to deduct certain expenses on their state tax return. This would be to counteract the block from making federal deductions under the IRS for those in the industry.

Learn more about the new bill →

Read More:

• Alloy Silverstein Named a Top Cannabis Consulting Firm
• Cannabis Taxes in New Jersey
• NJ Cannabis and the Social Equity Excise Fee
• From Seed to Sale: The Growing NJ Market for Cannabis
• Recreational Cannabis in New Jersey Update
• Taxation on Marijuana in NJ? Ren Cicalese III, CPA, MST Chimes in on New Jersey 101.5 FM

The post Defining 280E for Cannabis Businesses in New Jersey appeared first on Alloy Silverstein.