We all know the challenges that new businesses — especially new small businesses — face in getting off the ground, but cannabis businesses are facing an unprecedented hurdle that Springfield should tackle immediately.
IRS Code Section 280e prohibits cannabis businesses from deducting normal expenses, like rent, utilities and payroll. As a result, these companies — particularly those run by minority business owners who have received social equity licenses — are at a severe disadvantage. These companies pay taxes on gross profit, which can be more than double their net income. Cannabis businesses that can’t deduct these expenses are unable to funnel that money back into growing their company, creating more jobs and contributing to the economy.
