Why it matters: The article discusses a protest by a cannabis company in Massachusetts against an IRS tax rule that imposes higher taxes on regulated marijuana companies compared to businesses in other industries. The tax rule, known as 280E, prevents cannabis businesses from claiming standard business tax deductions, making them less profitable.
What they are saying: Lucas McCann, from CannDelta, explains that 280E is an outdated tax legislation created to prevent drug dealers from claiming business expenses on their taxes. Despite operating legally under state law, cannabis businesses are still treated as illicit businesses federally. MariMed, the cannabis company behind the protest, believes that 280E has a negative financial impact on legal cannabis operators and aims to effectuate policy change to promote industry growth and advancement.
The big picture: The protest by MariMed draws parallels to the Boston Tea Party of 1773, where colonists protested high taxes levied by the British Crown. The company hopes to draw attention to the unfairness of 280E, which negatively affects patients, consumers, and businesses in the regulated cannabis industry. Although repealing the tax rule requires legislative action, there are currently no bills specifically addressing 280E.
What to watch: The comprehensive legalization of cannabis or a rescheduling of cannabis could potentially render 280E irrelevant. However, achieving federal cannabis reform is challenging, and there is currently no clear path towards eliminating the tax rule.
Take: The protest by MariMed highlights the financial burden imposed on state-legal cannabis businesses due to the IRS tax rule. The comparison to the Boston Tea Party is a clever way to draw attention to the issue. However, resolving the problem will require significant legislative action or a broader shift in federal cannabis policy.
