canna law blog
Canna Law Blog

Cannabis Taxes and Section 280E: Canna Care v. The IRS

The United States Court of Appeals for the Ninth Circuit recently ruled on its second tax case regarding IRC §280E.  Decisions from the Ninth Circuit are significant as they apply to the cannabis-friendly states of Alaska, California, Nevada, Oregon; and Washington. In Canna Care vs. the Commissioner, the Court of Appeals upheld the United States Tax

canna law blog
Canna Law Blog

Cannabis Taxation: Another Day, Another 280E Case (or Two)

On June 13, the U.S. Tax Court issued an opinion regarding the application of IRC §280E. In Alterman v Commissioner of Internal Revenue (“Alterman“) the Court held, yet again, that IRC §280E operates to disallow a cannabis businesses’ tax deductions. A few days later, the Court also issued Loughman vs. Commissioner of Internal Revenue (“Loughman“). In that

canna law blog
Canna Law Blog

Cannabis Taxation: Does IRC Section 280E Apply to Industrial Hemp?

Short answer: It depends. As we discussed last week, the US Court of Appeals for the 9th Circuit in Hemp Industries Assn. et.al., vs. U.S. Drug Enforcement Admin., upheld the Drug Enforcement Administration’s (DEA) broad rule creating a separate classification for “Marijuana Extracts.”  Marijuana Extracts are broadly defined as “any extract containing one or more cannabinoids

cannabis tax 280E
Canna Law Blog

IRC § 280E is a Target for Cannabis Legal Reform in 2023

Will we see tax reform in 2023 for cannabis sellers? Specifically, will Congress finally get something done about the pain inflicted on industry by the Internal Revenue Code at 26 USC § 280E? (“IRC 28oE”.) It feels like a long shot, but you never know. After many attempts to get the SAFE Banking Act through

China contracts that work
Canna Law Blog

Why We Love the Harborside IRC § 280E Appeal

Recently, I mentioned that except for Champ v. Commissioner, no cannabis company has ever won an Internal Revenue Code § 280E case. One of the more famous setbacks was a 2018 case known as Harborside v. Commissioner, which expressly found IRC § 280E constitutional. That decision started with the memorable line that: “[Harborside] owns what

canna law blog
Canna Law Blog

Marijuana Businesses and IRC 280E – More Clarity?  

Another day, another (tax) dollar. The U.S. Tax Court again addressed IRC §280E in the recent case Canna Care, Inc. v. Commissioner, disallowing all of the California’s dispensary’s “operating deductions” under IRC §280E. Unlike prior cases, the Tax Court in Canna Care does not address the computation of COGS, but rather the deduction of regular business expenses, such

canna law blog
Canna Law Blog

Cannabis Taxation and Yet Another (BAD) 280E Case

In Alpenglow Botanicals LLC v the United States of America the United States Court of Appeals for the Tenth Circuit just ruled that the IRS has the authority to determine that a cannabis business is trafficking in a controlled substance for purposes of applying IRC §280E. This decision is going to shift how cannabis businesses pay

canna law blog
Canna Law Blog

In the Wake of Marijuana Legalization, It’s Time to Repeal Section 280E

As lawyers, we were trained to spot injustice. Section 280E of the Internal Revenue Code is an injustice. For that reason, we have and will continue to write about why Section 280E should be repealed. New York lawyer/writer Anne Wallace recently wrote an article, Time to Repeal Section 280E, effectively arguing for repealing Section 280E. The article notes

canna law blog
Canna Law Blog

Marijuana Taxation: 280e Ain’t Getting Better Anytime Soon

The marijuana industry is finally beginning to experience meaningful movement on the national level, slowly chipping away at federal prohibition. With the most recent Cole Memo, FinCEN guidelines, legalization in two additional states and D.C., improving Veteran access to cannabis for medical use, and a tiny take-down of at least one significant federal barrier to marijuana

COGS
Canna Law Blog

Oregon Tax Court Rules on Marijuana Grow COGS

For several years one of the biggest problems the cannabis industry has faced is I.R.C. Section 280E. It suffocates the regulated marijuana industry. A recent decision by the Oregon Tax Court addresses Section 280E and what may properly fall under Cost of Goods Sold (“COGS”) in the context of a marijuana grow operation. (See here, here, here, here and here