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Editor’s note: The amount projected by Mr. Jordan refers to Curaleaf’s annual revenue, not that of the entire industry as previously stated.

Boris Jordan, founder and executive chairman of the board of Curaleaf Holdings, Inc. (CSE:CURA) (OTCQX:CURLF) spoke with CNBC's Squawk on the Street Friday about President Joe Biden's plan to reclassify cannabis to a Schedule III substance.

Jordan opened the conversation by saying this time it seems the government is taking a much more serious approach, "one based on science."

"This decision is important for two reasons. The first is, is that it will allow for research, very much needed medical research on this plant and the various cannabinoids in this plant," said Jordan, adding that government-funded research can presumably be undertaken once cannabis is moved to a Schedule III substance.

And Then There's The IRS

In addition to helping the industry in terms of safety and research there is the black market and the IRS. Jordan explains how they're connected.

"Consumers today are buying black market products because it is cheap because of this capricious tax that we have to pay," Jordan said. "We will be able to bring down prices forcing consumers to go to the regulated market where products are safe and tested. And also, social equity licenses, small entrepreneurs, they can't operate in this industry due to this tax, they will also be able to prosper and that's really important for the industry."

Jordan talked about how rescheduling relieves the cannabis industry of the ‘capricious and unconstitutional 280e tax which has been burdening the industry over the last 10 years."

Which Means?

Jordan broke it down with some shockingly large dollar amounts being unfairly paid by the industry and what it will mean when the pain stops.

"The industry pays approximately a 70 to 75% tax," Jordan said, whereas "other companies in the United States pay a 20 to 22% tax. So, it has a very profound effect on the industry.” To put it in perspective, relieving, or rescinding this tax, he said, will contribute to $150 to $200 million to Curaleaf’s bottom line of this year's projected revenue.

Illicit Market Vs. Legal Market: Will The Twain Ever Meet?

Jordan indicated that the twain will indeed meet or at least it should. In terms of the booming illicit cannabis market, he told CBNC that the change in marijuana's schedule is going to help the industry strike a balance.

$70 Billion Vs. $30 Billion

The U.S. industry is estimated to be worth approximately $100 billion or more. That said, Jordan pointed out that the illicit cannabis market pulls in $70 billion a year whereas the regulated earns around $30 billion. "That illicit market today will most likely start moving into the legal regulated market therefore giving regulated players much more strength to operate, much better financial help which I think will lead to consolidation in the industry and a lot more entrepreneurship." That in turn will enable "new businesses, craft growers craft companies to develop because they'll be able to write off their expenses and not pay exorbitant high taxes," he concluded.

Sounds like a win-win.

Boris Jordan has been a keynote speaker at numerous Benzinga Cannabis Conferences so you will likely run into him at the upcoming the Benzinga Cannabis Capital Conference in Chicago this October 8-9. Meet other top executives like Jordan as well as with investors, policymakers and advocates to explore the industry's seemingly bright future. Get your tickets now before prices increase by following this link.

Now Read: EXCLUSIVE – System Of A Down’s Shavo On Cannabis Rescheduling: ‘Still A Long Way To Go But It’s A Huge Milestone’

Photo: Benzinga

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07:43pm ET05/17/2024
What are the legal consequences of rescheduling cannabis to Schedule III in the Controlled Substances Act (CSA)?Now that President Joe Biden has announced that his administration is officially moving to reschedule marijuana under federal law, followed by the Department of Justice's (DOJ) Attorney General Merrick Garland formally initiating the rescheduling process with the submission of a legal review, let's take a look at what Congressional Research Service's experts said in their recent report.Even though cannabis companies and legalization advocates overwhelmingly welcomed cannabis reform efforts "moving marijuana from Schedule I to Schedule III, without other legal changes, would not bring the state-legal medical or recreational marijuana industry into compliance with federal controlled substances law," according to a report published on May 1.
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06:17pm ET05/17/2024
Colorado cannabis sales rebounded in March, reaching $126.6 million and up from $114.4 million in February, according to the Colorado Department of Revenue's report from last week. However, year-over-year, sales are down considering March 2023 sales of $139.6 million.Following a record of $288.8 million in cannabis sales in March, Michigan cannabis sales for April fell to $278.6 million, representing a sequential decrease of 3.6%. Year-over-year, cannabis sales increased 13.2%, according to the Michigan Cannabis Regulatory Agency's data.
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