MariMed submits DEA applications as cannabis moves to Schedule III

MariMed Inc. took the first step toward federal compliance by filing DEA registration applications for its medical cannabis operations.

MariMed Inc. submitted applications with the U.S. Drug Enforcement Agency to register certain state-licensed medical cannabis businesses, a required step to qualify for protections under the federal rescheduling of marijuana to Schedule III of the Controlled Substances Act. The Norwood, Massachusetts-based multi-state operator said the move aligns with the removal of Internal Revenue Code Section 280E restrictions, which have barred cannabis companies from deducting ordinary business expenses — a tax burden that has effectively pushed effective tax rates above 70% for some operators.

"DEA registration of certain of our medical businesses marks an important step forward for MariMed as we move the Company toward becoming a federally legal business," Jon Levine, chief executive officer of MariMed, said.

The rescheduling, which reclassifies cannabis from Schedule I to Schedule III under the Controlled Substances Act, grants federal safe harbor to licensed operators that register with the DEA. Schedule III substances are considered to have a moderate to low potential for dependence, compared with Schedule I drugs defined as having no accepted medical use and a high abuse potential. The change eliminates Section 280E penalties for registered medical cannabis companies, allowing them to deduct standard business expenses like rent, salaries, and marketing — deductions that have been unavailable to the industry since the tax code was applied to cannabis in 1982.

For MariMed, which operates cultivation, production, and retail facilities across multiple states, DEA registration unlocks a tax structure that could meaningfully improve profitability. The company's brand portfolio includes Betty's Eddies, Bubby's Baked, Vibations, InHouse, and Nature's Heritage. The broader impact extends beyond MariMed: every state-licensed medical cannabis operator that completes DEA registration stands to benefit from the same tax relief, potentially reshaping the financial landscape of an industry long constrained by federal prohibition.

The applications come as the DEA processes registrations for medical cannabis operators nationwide following the rescheduling rule's effective date. Companies that fail to register risk remaining subject to Section 280E, creating a two-tier system within the industry where registered operators gain a structural cost advantage over non-registered peers. The timeline for DEA approval of MariMed's applications has not yet been disclosed.

This article is for informational purposes only and does not constitute investment advice.