Under federal tax code, companies cannot deduct many ordinary business expenses if they deal in Schedule I or II controlled substances. That prohibition would no longer apply if marijuana becomes a Schedule III substance, finally allowing many cannabis companies to turn a profit, said Griffen Thorne, a cannabis industry attorney based in Los Angeles. “This would be a lifeline for an industry that has really been suffering,” Thorne said.

Many if not most people serving time are in state systems,” said Griffen Thorne, an attorney at Harris Sliwoski, a law firm that works with cannabis companies.