Recreational cannabis businesses operate in a world of conflicting state and federal laws. Several states have legalized recreational cannabis, yet, under federal law, cannabis remains an illegal Schedule I drug under the Controlled Substances Act (CSA).
Tag Archives: Deductions
The marijuana industry faces obstacles that other legal businesses do not have to overcome, including federal taxes. Bruce Nassau, a dispensary owner in Colorado, suffered the consequences of not being able to receive tax deductions.
On April 9, 2015, Rep. Earl Blumenauer and Sen. Ron Wyden announced that they will introduce the Small Business Tax Equity Act of 2015 in Congress next week. The purpose of the bill is to amend Section 280E of the Internal Revenue Code.
Section 280E of the Internal Revenue Code sharply limits the deductions legal marijuana businesses can take against federal income tax liability. It may be the biggest threat to the financial viability of many fledgling cannabusinesses.
Legal is good. Legal and prosperous is better, as far as investors are concerned. Now that five jurisdictions have opened the door to a recreational marijuana industry, it is time to re-examine the legal structure it takes to support a healthy business climate.