Weed Industry Is ‘Begging’ for Federal Taxes—Just Not Too Much

The cannabis industry is bracing for future federal taxation while at the same time warning that some proposals in Congress could make the illicit market even stronger.

Cannabis companies and lobbyists expect the Biden administration to reclassify cannabis as a Schedule III substance in the coming months, which could pave the way for legalization. Cannabis is currently a Schedule I substance, so it’s not taxed at the federal level and business owners can’t take advantage of deductions and other tax breaks available to other companies.

With schedule changes and possible legalization in the years ahead, some groups want to get ...