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Fed Reforms, Not Rate Cuts, Will Benefit Cannabis Industry, Say CEOs
The post Fed Reforms, Not Rate Cuts, Will Benefit Cannabis Industry, Say CEOs appeared on BitcoinEthereumNews.com. The Federal Reserve building in Washington DC superimposed on a twenty dollar bill and a grunge texture background getty The Federal Reserve’s decision to cut interest rates by a quarter point may be good news for the economy. But for cannabis CEOs operating in a fragmented, still federally illegal market, one where mom-and-pop shops are forced to operate as cash-only enterprises while still paying exorbitant taxes thanks to 280E, the verdict is mixed. Anthony Coniglio, CEO of NewLake Capital Partners, a Connecticut-based cannabis real estate firm, expresses cautious optimism. Although he says the news is encouraging, much will depend on how much further the central bank decides to cut rates. Early news reports suggest two more reductions may come this year. “Many operators have a 12 to 14% cost of debt, so a 25-basis point reduction is only a fraction of savings, but it could be a welcome boost to cash flow,” Coniglio explains. There are other ways it could alleviate headaches for cannabis operators/professionals. “Beyond the direct impact to cash flows, an easing cycle could boost interest in risk assets such as cannabis debt and equities,” continues Coniglio. “With a wall of refinancing coming in 2026 and 2027, increased interest in cannabis debt would be a welcome development. But let’s not confuse macro tailwinds with meaningful change. Without rescheduling, 280E relief and banking reform, capital will remain cautious and growth constrained.” Terry Mendez, CEO of Safe Harbor Financial, a Colorado-based cannabis banking services provider, echoes Coniglio’s sentiment. Although the tax cuts may have positive reverberations across the economy, that likely won’t be the case for the cannabis space. “The Fed’s decision to cut interest rates will ripple across the economy, lowering borrowing costs and stimulating investment,” said Mendez. “For the cannabis sector, however, the benefits remain limited. While most…
The post Fed Reforms, Not Rate Cuts, Will Benefit Cannabis Industry, Say CEOs appeared on BitcoinEthereumNews.com.
The Federal Reserve building in Washington DC superimposed on a twenty dollar bill and a grunge texture background getty The Federal Reserve’s decision to cut interest rates by a quarter point may be good news for the economy. But for cannabis CEOs operating in a fragmented, still federally illegal market, one where mom-and-pop shops are forced to operate as cash-only enterprises while still paying exorbitant taxes thanks to 280E, the verdict is mixed. Anthony Coniglio, CEO of NewLake Capital Partners, a Connecticut-based cannabis real estate firm, expresses cautious optimism. Although he says the news is encouraging, much will depend on how much further the central bank decides to cut rates. Early news reports suggest two more reductions may come this year. “Many operators have a 12 to 14% cost of debt, so a 25-basis point reduction is only a fraction of savings, but it could be a welcome boost to cash flow,” Coniglio explains. There are other ways it could alleviate headaches for cannabis operators/professionals. “Beyond the direct impact to cash flows, an easing cycle could boost interest in risk assets such as cannabis debt and equities,” continues Coniglio. “With a wall of refinancing coming in 2026 and 2027, increased interest in cannabis debt would be a welcome development. But let’s not confuse macro tailwinds with meaningful change. Without rescheduling, 280E relief and banking reform, capital will remain cautious and growth constrained.” Terry Mendez, CEO of Safe Harbor Financial, a Colorado-based cannabis banking services provider, echoes Coniglio’s sentiment. Although the tax cuts may have positive reverberations across the economy, that likely won’t be the case for the cannabis space. “The Fed’s decision to cut interest rates will ripple across the economy, lowering borrowing costs and stimulating investment,” said Mendez. “For the cannabis sector, however, the benefits remain limited. While most…
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