An upcoming change in federal regulations could save Maryland cannabis businesses millions of dollars in taxes.
The Drug Enforcement Administration is moving to reclassify cannabis as a Schedule III drug, taking cannabis from a substance that is viewed as having no medical use to occupying the same tier as mainstream medications like Codeine-based cough syrup. The decision will allow cannabis businesses to take advantage of the same tax deductions as most other businesses, providing a lifeline for many that are struggling to become profitable.
CEO Allison Siegel of Culta, a vertically integrated cannabis company with three Maryland dispensaries and a cannabis farm in Cambridge, believes the change will save her company millions of dollars. Much of this prediction is based on the fact that cannabis businesses currently pay higher taxes than conventional businesses due to a provision in federal law called 280e, which restricts tax deductions for companies that sell Schedule I and II drugs. If cannabis becomes a Schedule III drug, that provision would no longer apply to cannabis businesses, so they could deduct taxes from the cost of labor, rent and other expenses.
Click here to read the rest of the article written by Matt Hooke over at Washington Business Journal
