Trulieve, Curaleaf, Green Thumb Poised for Schedule III Tax Relief

Tax Burden Under Current Schedule I Rules

The three MSOs paid a combined $847 million in federal taxes in fiscal 2025 due to Section 280E, which bars cannabis businesses from deducting ordinary operating expenses. Trulieve led the group with an estimated $312 million tax bill, followed by Curaleaf at $289 million and Green Thumb at $246 million, according to Simply Wall St's analysis of recent earnings filings.

Section 280E applies to businesses trafficking Schedule I or Schedule II controlled substances. Because cannabis remains Schedule I, operators can deduct only cost of goods sold — not rent, payroll, marketing, or other standard business expenses. Effective tax rates for these companies range from 52% to 68%. That's far above the 21% corporate rate applied to non-cannabis businesses.

Projected Savings Under Schedule III

If cannabis moves to Schedule III, the three operators could reclaim $480 million to $590 million annually in deductible expenses, slashing effective tax rates to the mid-20% range. Trulieve's tax bill could fall by $178 million, Curaleaf's by $165 million, and Green Thumb's by $137 million, according to the analysis.

The math hinges on timing. The DEA's Notice of Proposed Rulemaking entered the public-comment phase in May 2024 and closed in July 2024. The agency hasn't announced a final-rule date, but industry analysts expect a decision by Q4 2026 or Q1 2027.

• Trulieve: estimated annual tax relief of $178M
• Curaleaf: estimated annual tax relief of $165M
• Green Thumb: estimated annual tax relief of $137M

Market Reaction and Valuation Implications

Equity markets have already priced in partial relief, but full Schedule III implementation could trigger a 15-25% revaluation across the MSO sector, according to Canaccord Genuity. Trulieve shares closed at $8.42 on August 16, up 34% year-to-date. Curaleaf and Green Thumb have posted similar gains, driven by investor anticipation of tax normalization.

The valuation gap between U.S. MSOs and Canadian licensed producers has narrowed from 8x to 4x enterprise-value-to-EBITDA multiples since the DEA's May 2024 rescheduling announcement. Analysts expect that gap to close further once the rule takes effect, unlocking institutional capital currently sidelined by federal illegality.

What Happens Next

The DEA must publish a final rule in the Federal Register before Schedule III takes effect, a process that typically requires 60-90 days after the agency's internal decision. Once published, the tax relief is retroactive to the effective date of the rule, not the date of announcement.

Operators are already adjusting their tax-planning models. Trulieve's CFO noted in the company's Q2 2026 earnings call that the firm has reserved $42 million for potential refund claims dating back to fiscal 2024, contingent on rescheduling. Curaleaf and Green Thumb have disclosed similar reserves in their 10-Q filings.

For full background on the rescheduling timeline and industry impact, see the CannIntel topic hub on Schedule III Tax Relief.

The next signal: a final DEA rule, expected between October 2026 and January 2027. Until then, MSOs continue operating under the 280E regime, with effective tax rates that make profitability a grind even for the largest players.