Why is the 280E Tax Code a burden to medicinal industries like Cannabis?
Taxes are everywhere, even in a small piece of candy up to your property dues. Still, this 280E Tax Code connotes unfairness to businesses, specifically in the Cannabis Industry, that is tagged as Schedule I due to a 1982 drug-trafficking case. This prohibits industries from deducting any expense related to controlled substances.
Simply put, the 280E Tax Code only recognizes the gross income of the industry and, by all means, taxes that gross income completely without allowing deductions like shipping and labor expenses. This tax code is without exemption even though Cannabis is legalized in many states for medicinal and recreational use.
With this, the Cannabis industry is struggling to stay in the market and has to double or even triple its efforts to cut back expenses and maximize the little revenue.
Is this tax code necessary, especially now that we’re in 2023? What is the real purpose of this tax code, and what are the benefits and impact of this on other businesses?
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