Cannabis research firm, Whitney Economics, conducted an impact analysis of federal taxes on the cannabis industry and it was not very pretty.
In 2022 alone, cannabis operators paid over $1.8 billion in additional taxes as compared to ordinary businesses. And worse, this excess is forecasted to increase to $2.1 billion in 2023.
Why Are Cannabis Operators Overpaying Taxes? Great Question
Cannabis operators are subject to federal tax provision 280E, a federal internal code and bane of the cannabis industry’s existence. It essentially penalizes anyone who sells “Schedule I or II controlled substances” from being able to deduct business expenses like other companies. And, as we know, cannabis is still classified as a Schedule I drug.
Beau Whitney, chief economist …