Proposed Amendment to §280(E)

§280(E) of the Internal Revenue Code poses one of the more frustrating challenges for the legal marijuana industry. §280(E) states:

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consist of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or any State in which such trade or business is conducted.

The impact of §280(E) is that marijuana businesses, even those that are in complete compliance with State regulations and laws, are not allowed to avail themselves of typical business tax deductions or credits.  This means that while many legal marijuana businesses generate high revenues, high profits do not often follow after the taxman takes his share.

Picture of tax forms on a desk.
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New Jersey CannaBusiness Association: “Updates on Cannabis Laws & Business Opportunities in New Jersey”

On September 27, 2017, Saiber attorneys attended the New Jersey CannaBusiness Association event at Galloping Hills Golf Course in Kenilworth, NJ.  The event was a great opportunity for potential cannabis entrepreneurs to learn about the potential upcoming business opportunities in New Jersey from industry leaders. Over four hundred people were in attendance.  The event was sponsored in part by Athletes for Care, an organization advocating for the careers of retired athletes, which in part advocates for medicinal cannabis.  Former athletes Marvin Washington (New York Jets, Defensive End), Leonard Marshall (New York Giants, Defensive Lineman), Eugene Monroe (Baltimore Ravens, Offensive Tackle) and Riley Cote (Philadelphia Flyers, Left Winger) were present at the event and participated in panel discussions.

Logo of New Jersey Cannabusiness Association.

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