Rescheduling impact calculator

What the rescheduling calculator computes

The tool produces three numbers:

• Extra federal tax from 280E today. The tax caused by operating expenses that get no federal deduction because they relate to adult-use sales.
• Cash proxy today. Your pre-280E EBITDA less that extra tax.
• Hypothetical EBITDA if adult-use were also Schedule III. The same business if adult-use marijuana were moved out of Schedule I and II, so that section 280E no longer applied to any of it.

The legal background: the April 2026 order moved FDA-approved products and marijuana subject to a state medical license to Schedule III. Adult-use marijuana stayed in Schedule I. A separate proceeding on broader rescheduling went to a hearing that ran from 29 June to 15 July 2026. Post-hearing briefs were due 17 August, and as of mid-September 2026 the judge’s recommendation was still pending with no final rule. Current status is tracked on rescheduling status and what it changes.

The formula

• Extra federal tax from 280E = SG&A disallowed under 280E x adult-use share x federal tax rate
• Cash proxy today = pre-280E EBITDA - extra federal tax
• Hypothetical = pre-280E EBITDA

The proxy is not full after-tax cash flow. It removes only the tax that 280E adds, so the difference between the two figures is exactly what full rescheduling would save each year on these inputs.

Inputs

Input	What to enter
Pre-280E EBITDA	Normalized trailing twelve month EBITDA before federal income tax
SG&A disallowed under 280E	Operating expenses outside cost of goods sold that would be non-deductible if the whole business were adult-use: store payroll, rent, marketing, administration. Take it from the tax return workpapers, not the income statement
Adult-use share	A decimal from 0 to 1. The share of activity that is adult-use and so still subject to 280E. Enter 1 for an adult-use-only business and 0 for medical-only
Federal tax rate	A decimal. The default 0.21 is the federal corporate rate. Owners of pass-through entities should enter their own marginal rate, for example 0.37

Worked example

Illustrative, using the tool’s defaults: EBITDA $500,000, disallowed SG&A $400,000, adult-use share 0.7, federal tax rate 0.21.

Step	Arithmetic	Result
Adult-use expenses with no deduction	$400,000 x 0.7	$280,000
Extra federal tax from 280E	$280,000 x 0.21	$58,800 a year
Cash proxy today	$500,000 - $58,800	$441,200
Hypothetical if adult-use were Schedule III	unchanged	$500,000

Change the rate input to 0.37 for an owner in the top individual bracket and the extra tax becomes $280,000 x 0.37 = $103,600, leaving a proxy of $396,400. So for this business, full rescheduling would be worth roughly $59,000 to $104,000 a year in federal tax, depending on entity type and the owners’ rates. For scale, Headset estimated that a typical dispensary would save about $268,000 a year under Schedule III treatment, as reported by Cannabis Business Times. Your figure depends on how much expense sits outside cost of goods sold, which is why retailers gain more than growers; see 280E by license type.

For a line-by-line tax estimate under current law, use the 280E effective tax rate calculator.

From tax savings to value

A buyer would capitalise the after-tax saving, then discount it for the chance it never arrives. Illustrative only: $58,800 a year at a 4x multiple is $235,200; at a one-in-three assumed probability that is about $78,000 of extra value today. The probability is a judgment, not a published figure. The market has not paid up in advance so far. Viridian Capital’s median multiple for larger U.S. MSOs was 5.1x 2026 EBITDA in November 2025, lower than in mid-2024, even as rescheduling moved forward.

Where buyer and seller disagree on the odds, a contingent payment tied to a final rule can bridge the gap; see earn-outs in cannabis deals. The wider valuation argument is on how rescheduling would affect valuation, the timing decision is on selling before or after rescheduling, and tax scenarios including refund claims and state conformity are on rescheduling tax scenarios.

Limitations

• Not a prediction. The tool’s own output says so. No outcome or date is implied.
• Proxy, not cash flow. The today figure deducts only the 280E-driven tax, not ordinary income tax, interest, or capital spending.
• One flat rate. Real tax is computed on the whole return; a single rate times disallowed expenses is an approximation.
• Apportionment is assumed. Dual operators must split expenses between medical and adult-use. Treasury previewed the approach on 23 April 2026, but detailed IRS guidance had not issued by mid-September 2026.
• Federal only. State income tax treatment varies and many states already allow the deductions.
• Static. It ignores competitive effects. If every operator’s tax falls, some of the saving may pass to customers through lower prices.
• Nothing else changes. Schedule III would not by itself permit interstate sales, SBA loans, or federal bankruptcy.

This page and the tool are educational and are not tax, legal, or valuation advice. To talk through what the scenarios mean for a sale or purchase you are considering, you can book a confidential intro call.