The pre-roll industry has exploded in recent years, becoming one of the most lucrative avenues for cannabis operators to take, even in declining markets.
Moving cannabis to Schedule III will only increase the opportunities in this category. Pre-roll manufacturers can expect new money, new consumers, and new products. Leveraging these new opportunities will determine who flourishes after Schedule III and who gets burned by the competition.
New Money
When cannabis is rescheduled to Schedule III, the 280E tax code currently burdening all plant-touching cannabis businesses will be removed from the industry, creating new opportunities by way of tax savings.
Pre-roll brands should expect competition to heat up. With the lift of 280E, new operators may feel more inclined to enter the cannabis market, and existing brands will have more revenue to back marketing efforts and new product lines.
Existing pre-roll brands should consider using these tax savings to upgrade their current pre-roll products, like choosing high-quality flower over leftover shake and trim, updating branding/packaging to better catch a shopper’s eye, and rolling the joint versus stuffing a cone to produce a better drag.
The removal of 280E also makes purchasing new equipment more feasible as operators will now be able