Massachusetts-based cannabis company executives dressed in colonial-era garb on a ship in Boston Harbor Wednesday as the Internal Revenue Service requires regulated cannabis companies to pay significantly higher taxes than companies in other industries. protested against the rules of Reminiscent of the legendary Boston Tea Party at the same location 250 years ago, the demonstration was orchestrated by licensed cannabis company Marimed to protest IRS Tax Rule 280E, which has baffled state-law cannabis companies across the country. was done.
Lucas McCann, co-founder and chief scientific officer of cannabis compliance consulting firm CannDelta, explores how IRS rules banning most standard business tax deductions will affect companies in the regulated cannabis industry. explained what
“Section 280E of the Internal Revenue Code is a difficult hurdle for cannabis businesses, including retail pharmacies. It’s the code that will be used,” McCann, who was not at Wednesday’s protests, wrote in an email. “Originating in the 1980s, this antiquated tax law was created to prevent drug dealers from claiming operating expenses from taxes. Although it operates legally, cannabis is still listed as a Schedule I substance, so federally speaking it is still an illegal business.”
Protests spark the Boston Tea Party
Wednesday’s protests recreated the famous Boston Tea Party of 1773, when colonists protested the high tax imposed by the British royal family on tea shipped to the New England colonies. In an act of independence-minded defiance, some members of the group “Sons of Liberty” disguised themselves as Native Americans, boarded ships docked in Boston Harbor, and dumped brown chests at sea in protest against high taxes. threw it into
Marimed’s demonstration revived the theme of the 250-year-old protest, this time with company executives dressed in period costumes boarding the schooner Liberty Star bearing a banner protesting the 280E. Brandishing boxes bearing the word “weed,” costumed protesters shouted slogans as they boarded ships and piled the boxes into Boston Harbor. The company said in a statement that the box was empty and made of natural wood and was quickly pulled from the water.
“As a multi-state cannabis business based in Boston, Marimed pays tribute to one of the most famous tax protests in history, the year of the 250th anniversary of the Boston Tea Party,” said the company’s patriotic ancestors. We protested in a way that made us proud.” written by the company. “By shedding light on the economic ramifications of Section 280E for legal cannabis businesses, Marimed hopes to make policy changes for growth and progress in the industry.”
Marimed CEO John Levin said the demonstration was a way to draw attention to a tax regime that could hurt patients and consumers and cripple the business of the regulated cannabis industry. . He also called on companies operating under state law to phase out 280E.
“Section 280E is unfair and hinders companies in their efforts to make cannabis available to consumers and medical cannabis patients in all legal states,” Levine said in a Marimed statement. “It should be abolished, and then the roadblocks to our mission to improve people’s daily lives through cannabis will be removed.”
However, abolition of taxation rules is easier said than done. Legislative repeal of this rule is needed, but so far, no bill to reform federal cannabis policy specifically addresses 280E. With blanket legalization of cannabis, the rule will be controversial, but a solution to that is unlikely any time soon.
“Several bills have been introduced in Washington, D.C., but to our knowledge, none of the bills contain language regarding the abolition of 280E,” Levine said in a statement. high times. “The most likely path to discontinuing 280E is for cannabis to be rescheduled or descheduled entirely. Nor is it happening, another example of Washington, D.C.’s conundrum on federal cannabis reform.”