Federal Income Tax Rules for Cannabis Businesses

calendar iconMay 31, 2022

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Since 1996, when California became the first state to legalize the medical use of marijuana, 38 more states have followed.  Additionally, approximately 18 states, as well as the District of Columbia, have passed legislation to allow for recreational or adult use of cannabis. With many listeners living in or vacationing in one of these states, this is a good time to review the difficult federal income tax rules applied to cannabis businesses. Barry Weins, Director in the Firm’s National Tax Group, joins Brooks and Sarah to discuss the tax laws that have an important impact on earnings of companies operating in state law allowed cannabis industry.

Chapter markers

2:35 – Overview

3:40 — Definitions and background

7:30 – Internal Revenue Code Section 280E

9:50 – How Section 280E impacts different companies

15:54 – Section 263A and taxpayers seeking relief from Section 280E

21:14 – Trends in the industry

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