Get Your FREE Subscription to HQ Magazine!
Registration is officially open for TPE24! You can save $75 when you pre-register today! Offer ends 12/31/23.

No Tax Breaks for Cannabis Companies

The U.S. Tax Court again ruled that Section 280E of the Internal Revenue Service (IRS) tax code is constitutional and cannabis companies aren’t entitled to common business deductions. Many cannabis companies that are legal under state law are facing effective tax rates as high as 70% because the federal government considers them to be trafficking in a Schedule I substance. If you want any kind of a tax break, move to California — a new measure there allows state deductions, starting next year, for cannabis companies that file their taxes as sole proprietors or partnerships.