If you are in the cannabis industry, you should already know Section 280E of the Internal Revenue Code. It
consists of only one sentence:
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) consists 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 the law of any State in which such trade or business is
conducted.
In simple terms, 280E denies a cannabis business the ability to
deduct its business expenses in computing its Federal income tax
liability. How this actually works and how can you plan around it
are topics beyond the scope of this post, so I suggest you
familiarize yourself before continuing. I'll
wait..............