On December 18, 2025 MariMed Inc. announced that the federal government had moved cannabis from Schedule I to Schedule III under the Controlled Substances Act. The change removes the IRS Section 280E tax penalty that has historically applied to cannabis‑related businesses, allowing MariMed to be taxed like other consumer packaged goods companies.
The elimination of Section 280E is expected to lift a significant tax burden that has compressed MariMed’s margins. In the fourth quarter of 2024 the company reported a GAAP net loss of $8.2 million on revenue of $1.2 billion, with a gross margin of 33 %. In the first quarter of 2025 the loss narrowed to $5.4 million, and the non‑GAAP adjusted gross margin rose to 41.3 %. The tax relief will reduce the effective tax rate, improving net income and free cash flow and freeing capital for growth initiatives.
MariMed’s financial performance has been challenged by price compression, ramp‑up costs for new facilities, and competitive pressure in certain retail locations. The company’s management has highlighted that the tax relief will help offset these headwinds by lowering operating expenses and improving profitability. The company’s CEO, Jon Levine, emphasized that the rescheduling is a “single greatest cannabis reform in U.S. history” and will enable the firm to invest more aggressively in its wholesale and brand portfolio.
While the rescheduling is a major regulatory win, it does not constitute full federal legalization. Cannabis remains a controlled substance, interstate commerce is still prohibited, and banking access continues to require separate legislative action such as the SAFE Banking Act. Nevertheless, the Schedule III status eases barriers to accredited medical research and may broaden consumer adoption, positioning MariMed to capture a larger share of the growing market.
The announcement signals a significant shift in MariMed’s operating environment. By removing the Section 280E penalty, the company can now allocate more resources to expansion, research, and operational efficiencies, potentially improving its competitive position and long‑term growth prospects.
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