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The likelihood of marijuana’s federal reclassification to Schedule III status has Big Law leaders&nbsp;eyeing opportunities to expand relationships with clients who have historically lacked the same tax benefits and bankruptcy protections as other sectors.

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Under cannabis’s current Schedule I status, Section 280E of the tax codes prevents businesses from deducting expenses involving the “trafficking” of Schedule I or II substances, restricting the amount of operating capital.

But removing 280E’s restrictions would “drop millions of dollars into these companies over time” because of the taxes they no longer have to pay,&nbsp;said Frank Segall, co-chair of Blank Rome’s newly formed cannabis practice, which launched upon&nbsp;<a href="https://www.law.com/americanlawyer/2024/05/01/blank-rome-recruits-25-burns-levinson-lawyers-to-launch-boston-office/">his arrival from Burns &amp; Levinson</a>&nbsp;this week.

“That will have an impact on public companies to use their stocks as currency to fund M&amp;A and will be able to put money back into business in a way they couldn’t before,”&nbsp;Segall said. “It will spur on an acquisition spree and regular growth.”

Blank Rome, a late bloomer in formally launching a cannabis practice, has been eyeing the launch of a cannabis practice for years, having serviced cannabis and cannabis-adjacent clients in small-scale transactions, according to firm leaders. The firm formally launched a cannabis practice this week in its newly established Boston office by recruiting all the cannabis practitioners from local firm Burns &amp; Levinson,&nbsp;including Segall.

Segall said&nbsp;his group’s move to the Am Law 100 firm provides his cannabis clients with deeper resources in tax, financing, health care and cybersecurity.

“Having a footprint in major markets for cannabis, like New York and New Jersey, allows us to provide another level of service and commitment to our clients,”&nbsp;he said.

To read the full article, please click&nbsp;<a href="https://www.law.com/americanlawyer/2024/05/02/deas-marijuana-rescheduling-plan-has-law-firms-high-on-expanding-relationships-with-cannabis-clients/">here</a>.

"DEA’s Marijuana Rescheduling Plan Has Law Firms High on Expanding Relationships with Cannabis Clients," by Justin Henry was published in&nbsp;<a href="https://www.law.com/americanlawyer/2024/05/02/deas-marijuana-rescheduling-plan-has-law-firms-high-on-expanding-relationships-with-cannabis-clients/">The American Lawyer</a>&nbsp;on May 2, 2024.

DEA’s Marijuana Rescheduling Plan Has Law Firms High on Expanding Relationships with Cannabis Clients

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DEA’s Marijuana Rescheduling Plan Has Law Firms High on Expanding Relationships with Cannabis Clients

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