Friday, December 8, 2023

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Cannabis Companies Paid More Than $1.8 Billion in Federal Taxes in 2022 Alone

The United States government collected over $1.8 Billion in federal taxes in 2022 from cannabis. Compared to many other sectors in the states, this number is staggering. This excess is also forecasted to increase by another $300 million by 2023.

These payments are the result of something called Section 280E of the federal Internal Revenue Code. Section 280E prevents companies considered traffickers of schedule 1 and schedule 2 controlled substances from deducting business expenses. Often this code is seen as a “thorn in the side of cannabis businesses” to many.

According to research done by analysis firms, cannabis companies will pay over $64 billion due to this 280E code over the next 10 years. If this code were to be repealed or cannabis be removed from the Schedule 1 controlled substance list, the revenue the government would make would half.

This burden is so rough for some companies that roughly 24% of cannabis operators surveyed said that their business is profitable. Cannabis reform is something that needs to happen yesterday in the United States. Without it, smaller and larger businesses alike will continue to suffer from the heavy burden of federal taxes.

Read the whole article here.

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