COLORADO SPRINGS, Colo. (KOAA) — Cannabis retailers are celebrating what they see as a major victory for their industry following President Trump's recent executive order to reclassify marijuana from a Schedule 1 controlled substance to Schedule 3.
The executive order would move cannabis from the same category as heroin and methamphetamine down to Schedule 3, alongside drugs like LSD and Tylenol with codeine.
This reclassification acknowledges that cannabis has accepted medical use, though the change still requires approval from the Department of Justice and the DEA.
"It's just good policy. Marijuana is not as harmful as heroin. It is not more harmful than fentanyl, a drug that's killing thousands of Americans a day," says Karlie Van Arnam, the General Manager at Pure Dispensary.
The most significant impact would be on business operations and taxation. Currently, cannabis retailers face severe tax penalties for selling a Schedule 1 substance.
"We're essentially taxed at about a 70% effective tax rate, so a huge amount of our money goes to the IRS,” says Van Arnam.
Under Schedule 1 classification, many standard business expenses are disallowed by the IRS.
"The salaries we pay the bartenders, the rent for the stores, the lights on in the building, those are all expenses that are disallowed by the IRS because we're selling a Schedule 1 controlled substance," she says.
The reclassification would allow dispensaries to be subject to the standard federal business tax rate of 21%.
"These businesses aren't going to drown under these tax burdens. That money can be reinfused into the companies, we can offer better benefits, better packages for our bud tenders, can you know have better product selection, pass savings along to consumers," Van Arnam says.
Another major change would be the ability to accept credit cards for the first time.
"We're really hoping this paves the way for safer banking, better access, where customers can come in and use a credit card like they can anywhere else.”
However, marijuana remains illegal at the federal level.
The Colorado Springs Police Department stated they "will continue to follow CO state law, and Colorado Springs City ordinances regarding marijuana. Executive Presidential orders would not, in this case, cause any immediate change in enforcement for CSPD in the city of Colorado Springs."
Despite the regulatory uncertainty, employees at Pure Cannabis Dispensary remain optimistic about the potential changes.
"It's gonna be great for our employees, for businesses, and ultimately for customers," says Van Arnam.
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