September 11, 2026
Why Cannabis Businesses Run Out of Cash Even When Their P&L Shows a Profit in 2026
Here is the uncomfortable truth: your P&L can be accurate and still give you a dangerously incomplete picture of your business.
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Here is the uncomfortable truth: your P&L can be accurate and still give you a dangerously incomplete picture of your business.
If you're new to the cannabis industry, here's something most people learn the hard way: regulators don't just watch what you sell, they watch every dollar you handle.
On April 23, 2026, the DOJ issued a final order moving state-licensed medical marijuana — along with FDA-approved cannabis products — from Schedule I to Schedule III. Effective April 22, 2026, qualifying medical cannabis operations are no longer subject to IRC §280E.
Stephanie Murrin signed her 1993 tax return in good faith. Her preparer, Duane Howell, placed false entries on it. She did not know, and the IRS later stipulated she had no intent to evade tax. She signed her returns through 1999 the same way.
Your second-highest-producing associate has been with your medical practice nine years. She joined the year you moved into the building, took her first call on a Tuesday in October, and within eighteen months had built a panel that ran three deep on the schedule by Wednesday morning.
Medical practice consultants charge tens of thousands to help you set goals. Make plans. Improve processes. Find your “why”. But successful practices, the ones that enable owners to live the lives they want, aren’t built that way.
The IRS doesn’t forget that cannabis exists. Every dispensary, cultivator, and MSO in the U.S. operates legally under state law. But they still answer to a federal tax code that treats them otherwise.
Every medical practice owner knows the pattern. The renewal cycle opens. The timeline compresses. The negotiation happens on the payer’s schedule. The rate moves the same two percent. Six months later, nothing has changed.
You have pushed back on a contract renewal before. You prepared. You presented the data. You made the case clearly enough that the conversation lasted longer than usual. And then you signed. The rate moved two percent. You filed the paperwork and moved on.
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