Key Insights from the 2024 AICPA Cannabis Conference: Industry Updates & Opportunities

The Cannabis industry is undergoing transformative changes, with
rescheduling imminent and valuations expected to surge. This comprehensive
overview from the 2024 AICPA Cannabis Conference highlights crucial
developments affecting businesses, investors, and service providers in the
space. Watch the video for an in-depth overview of AICPA's 2024 Cannabis
Conference.

We cover:

- Industry support and leadership
- The cannabis legalization landscape
- Rescheduling Updates
- Financial and Tax Implications of Rescheduling
- Industry Challenges and Opportunities
- The Future of Cannabis After Rescheduling

We provide a high-level overview of these topics and key points from the
video below.


*Industry Support & Leadership*

The conference demonstrated unprecedented institutional backing for the
Cannabis industry, featuring top executives from major accounting firms,
government agencies, and legal practices.

The impressive lineup of industry leaders and experts included:

- Carla McCall, CEO of AAF (top 100 accounting firm) and AICPA Chair
- Luke Ortner, Senior Counsel at the IRS Office of Chief Counsel
- Nathaniel Pollack, former DOJ Cannabis Practice Division leader
- Aaron Smith, founder of NCIA
- Ron (leading Cannabis valuation expert)
- Legal experts from top firms like Holland & Hart and Vicente

This high-level participation signals growing mainstream acceptance and
professionalization of the Cannabis sector. For the first time in history,
we’ve got one of the two major parties in the United States (the Democratic
Party) expressing their full support for Cannabis legalization.


*The Cannabis Legalization Landscape*

Cannabis legalization continues to expand across the United States, with
half the states now allowing adult use and more preparing for legalization
votes. The overwhelming public support is driving rapid market growth and
regulatory changes.


*Current State of Legalization*

- 25 states now have fully legal Cannabis (similar to alcohol
regulations)
- Additional states maintain medical marijuana programs with substantial
markets
- New developments:
- North Dakota, Nebraska, and Florida preparing for full legalization
votes
- Pennsylvania legislators introducing full legalization bill


*Public Support*

- 8 out of 10 Americans support Cannabis legalization
- This unprecedented level of bipartisan agreement has driven rapid
market growth
- The legal market has expanded from zero to $40 billion


*Rescheduling Updates*

Cannabis rescheduling to Schedule III appears inevitable, supported by
federal agencies and public opinion. This change will fundamentally
transform the industry's business operations and financial landscape,
particularly regarding tax treatment and banking access.


*The Path to Schedule III*

- HHS and FDA have approved moving Cannabis to Schedule III
- The public comment period resulted in:
- 40,000 comments received
- 92% positive responses
- 57% advocating for complete de-scheduling
- December 2nd ALJ hearing scheduled
- The broad consensus among experts: rescheduling to Schedule III is "a
done deal"


*Political Support*

- Bipartisan backing emerging
- Both major party candidates showing support:
- Current administration backing Cannabis reform
- Trump expressed support for medical Cannabis and Florida's approach


*Financial & Tax Implications*

The rescheduling of Cannabis to Schedule III will eliminate 280E tax
restrictions for the industry, potentially leading to an eight-fold
increase in company valuations. This change is expected to trigger
significant investment activity and market consolidation.


*280E Impact*

- 280E currently applies while Cannabis remains Schedule I
- Will cease to affect the Cannabis industry once Schedule III status is
achieved
- Businesses should prepare for transition but maintain compliance until
official rescheduling


*Valuation Implications*

According to Viridian Capital:

- Company valuations are expected to increase significantly
post-rescheduling
- Current estimated value per share: $1.76
- Projected value post-Schedule III: $13.36 (approximately 8x increase)
- Increased institutional investment is expected
- A surge in M&A activity anticipated


*Industry Challenges & Opportunities*

While the industry faces challenges with intoxicating hemp products and
regulatory complexities, significant opportunities exist in professional
services, technology integration, and market expansion. The sector must
balance rapid growth with regulatory compliance and operational efficiency.


*Emerging Issues*

- Intoxicating hemp products creating market complications
- Need for updated Farm Bill regulations
- State-by-state market variations affecting business values


*Growth Areas*

- Client accounting services showing strong growth potential
- AI emerging as a top consideration for firms
- Talent acquisition and retention remain crucial challenges


*Looking Ahead*

The Cannabis industry is at a pivotal moment, with regulatory changes,
market expansion, and increased institutional investment creating
unprecedented opportunities for growth and professionalization. Businesses
should prepare for rapid transformation while maintaining compliance with
current regulations.


*Join the Future of Cannabis Finance*

As the Cannabis industry enters this transformative period, the need for
qualified financial professionals has never been greater. For accounting
professionals interested in serving this dynamic market, DOPE CFO offers a nationally
recognized program that provides comprehensive training in
Cannabis-specific accounting practices and high-level CFO services.

Whether you're an accounting professional looking to expand into Cannabis
or a business owner seeking expert financial guidance, DOPE CFO's network
of Certified Advisors is ready to help navigate the industry's evolution.