Cannabis, or Marijuana, is fast becoming the law of the land, either medically or recreationally. As a result, the market is adjusting with businesses coming online involved in the cultivation, distribution and sale of cannabis.
Although cannabis may be legal in some form in 33 states, it is still illegal at the federal level. As a result, the ability of cannabis businesses to properly deduct their expenses is severely restricted. The IRS disallows deductions of non cannabis expenses per Internal Revenue Code Section 280E. As a result, without careful planning, cannabis businesses may wind up paying a crippling amount of unnecessary taxes due to the disallowance of business expenses.
We have experience working with cannabis businesses to structure their operation in ways that allow them to deduct both cannabis and non-cannabis business expenses.
If you are getting into the cannabis industry, please give us a call to help you get started and ensure you are able to deduct as many expenses as possible.
