Thursday, June 13, 2024

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Weed Companies can make a good amount of money back with tax refunds

Section 280E in the tax code prevents federally illegal businesses from deducting their expenses. This would include businesses revolving around marijuana, and has a been a thorn in the side for over a decade now. It has resulted in hundreds of millions of dollars left out of the hands of companies due to a lack of deduction.

Recently, however, in a US District Court in Massachusetts, Canna Provisions is arguing that marijuana is technically no longer illegal under the Controlled Substances Act. And if that’s the case, 280E does not apply. The court case is still active, and will probably find its way into the hands of the US Supreme Court, but Trulieve wasted no time in capatlizing on this ambiguity. They filed amended tax returns for the years 2019 through 2021, and got an extra $143 million back.

An article at MJBizDaily is making the case that everyone else should follow in the footsteps of Trulieve before it’s too late.

For one, you only have three years to amend your tax return, which is why Trulieve could only go back to 2019.

The author, Nick Richards, also argues that this ruling has a better chance in the conservative edged Supreme Court.

“The current conservative Supreme Court seems poised to overturn existing precedent that it believes does not honor the original meaning of the U.S. Constitution, and the expansion of commerce clause power is one such area. Examples of this include the court striking down portions of the Affordable Care Act, limiting the Clean Water Act and overruling federal sports gambling laws. It is plausible that marijuana could be legalized by the Supreme Court, thereby eliminating 280E and returning many cannabis companies to profitability,” Nick Richards writes.

This would be huge for thousands of struggling cannabis companies out there, so hopefully the article reaches many of those eyes.

Here’s the original MJBizDaily article.

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