MariMed Protests IRS Tax Code Section 280E
Cannabis Businesses Deserve Tax Relief!
The cannabis industry has made great strides in going mainstream. Consumer acceptance has exploded, with approximately 90 percent of U.S. adults supporting cannabis legalization.
MariMed is proud to participate in the legal cannabis industry and thankful that so many people have embraced cannabis as part of their health and wellness lifestyle. We will continue to innovate and distribute high quality, consistent and effective products in the markets where we operate.
Despite the widespread consumer acceptance, cannabis remains classified as a Schedule 1, federally illegal substance as defined by the Controlled Substances Act, on par with heroin.
The Schedule 1 classification poses enormous challenges for legal cannabis businesses like MariMed and easy access to legal cannabis by millions of Americans who reside in non-legal states. In fact, the current classification is the top barrier to federal legalization of cannabis.
Until cannabis is re-scheduled or de-scheduled, legal cannabis enterprises face financial and operational challenges that significantly increase the cost of conducting business and result in higher product prices the register for consumers and medical cannabis patients.
One prime example of these challenges is Section 280E of the Internal Revenue Tax Code. When calculating their taxes, Section 280E prevents the deduction of ordinary business expenses associated with “trafficking” a Schedule 1 or 2 controlled substance. The existence of Section 280E means cannabis businesses pay much more in taxes than they would if it were repealed, according to Wolf & Company.
In our view, the rule is unfair. Many bipartisan lawmakers agree and have been working for years to pass legislation that would treat cannabis operators like any other legitimate business. President Biden has asked for the Department of Health and Human Services to provide an opinion on the scheduling of cannabis, which HHS has said will come this year. There is optimism that cannabis may finally be re-scheduled or perhaps even de-scheduled. To date, though, there has been no change at the federal level.
At MariMed, we believe this is unacceptable. IRS Code 280E is unfair and outdated, and it needs to be changed.
As a Boston-based, multi-state cannabis operator, we decided to protest in a way that would make our Patriot ancestors proud. We called it “The Boston 280E THC Party,” paying homage to the Boston Tea Party, the most famous tax protest in our nation’s history.
Approximately 250 years ago, a group of frustrated American colonists, angry at Britain for imposing “taxation without representation,” dumped chests of imported tea into Boston Harbor to make their point heard.
Channeling that revolt’s rebellious spirit while dressed in traditional colonial garb, MariMed executives and team members surprised the crowds at Boston Harbor on July 12th, 2023, when we boarded the Liberty Star schooner, heaved cargo chests emblazoned with “WEED” overboard1 and chanted anti-280E slogans.
Most importantly, we asked others to join the fight against 280E.
Now, we’re asking you to do the same. Please contact your representatives in Congress and the Senate and urge them to support the re-scheduling or de-scheduling of cannabis and to support any Federal legislation that would treat legal cannabis businesses like any other enterprise.
1 No cannabis was consumed, destroyed, or otherwise used during this event. Further, the natural wood, sustainable boxes tossed into the Boston Harbor were empty and were pulled immediately from the harbor.