Vinni Belfiore

Cannabis Business and Taxes: Section 280E

One of the greatest challenges facing the emerging Pennsylvania Medicinal Cannabis Industry is addressing taxes and appropriate deductions for operating expenses.

Because Marijuana is classified as a Schedule 1 controlled substance, it falls under Section 280E of the Internal Revenue code, which denies a medical marijuana business from deducting the business operating expenses on their tax return, even in states where the sale of medical marijuana is legal.

The United States Court of Appeals for the Ninth Circuit recently ruled on it’s second tax case involving IRC 280E in Canna Care vs. The Commission.

Canna Care, Inc., of California, appealed a decision by The United States Tax Court that IRC 280E applies to a business engaged in the sale of a substance that, while legal in California, is still illegal under Federal law.

The Tax Court ruled that medical marijuana is a Schedule 1 controlled substance and that the sale of medical marijuana is always considered trafficking under IRC 280E, even when permitted by state law.

The Ninth Circuit ultimately upheld the Tax Court ruling, however, Canna Care attempted to raise new issues on appeal, including a Constitutional challenge of IRC 280E as being a violation of the 8th Amendment protection against imposing excessive fines, however, because the issue was not raised in the original case, the Ninth Circuit did not rule on the Constitutional argument.

Challenging federal statues on constitutional grounds can often be difficult, but the constitutional arguments may have some merit. It is a best practice to raise all arguments before the court so they are not waived on appeal.

Further, all cannabis related businesses should consider filing protective refund claims, which will keep open the statute of limitations in the event IRC 280E is overturned by a court.

It is important for a cannabis business to understand the impact of IRC 280E on it’s tax liability and the potential risks of NOT applying IRC 280E when filing a return. The immediate tax savings may be attractive but in the long run, those savings must be weighed against the potential costs of having to defend their position down the road.

Cannabis Legal Solutions is available to help cannabis businesses develop a plan for dealing with IRC 280E and creating a strategy to negotiate the negative affects of IRC 280E and defend their position if challenged.

 

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Vinni BelfioreCannabis Business and Taxes: Section 280E
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Educational Cannabis Law Presentations with Patrick Nightingale

Patrick K. Nightingale is a leader in the formation of Pennsylvania’s medicinal cannabis industry. In fact, Mr. Nightingale was a central figure in getting Pennsylvania’s Act 16 Medicinal Cannabis Law passed. He has testified at the Pennsylvania State House on behalf of patients and has worked with state and local officials to bring about meaningful change in Pennsylvania’s treatment of cannabis as medicine.  He is currently working with the city of Pittsburgh to implement a decriminalization policy for possession of small amounts of marijuana.

Mr. Nightingale is a regular guest speaker on the subject of marijuana law for a number of major media outlets throughout Pennsylvania, including KDKA radio and television, WTAE TV 4, Pittsburgh City Paper and the Pittsburgh Tribune Review.

His knowledge and experience are unparalleled and he is available to bring that knowledge to your next conference or group meeting.

Mr. Nightingale has been the featured speaker at many medicinal cannabis-related events, and has also taught his fellow attorneys at various Continuing Legal Education (CLE) classes for the Allegheny County Bar Association, Allegheny County District Attorney’s Office and the 2017 Westmoreland County Bench Bar Conference.

If you’d like to book Mr. Nightingale to speak at your next event or conference, please contact Cannabis Legal Solutions at 412.553.1744.

 

 

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Vinni BelfioreEducational Cannabis Law Presentations with Patrick Nightingale
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Cannabis Legal News Update 08-07-17

There has been a lot of news this week in the world of marijuana law.

New Legislation has been introduced by New Jersey Senator Cory Booker (D) that is being described as ‘the most far reaching overhaul of federal marijuana law ever introduced’. The Bill addresses the disparity between arrests of minorities for marijuana related crimes — African Americans are 4 times more likely to be arrested and incarcerated than white people. Booker’s Bill would legalize marijuana, expunge federal marijuana convictions and penalize states with racially-disparate arrest or incarceration rates for marijuana-related crimes. The changes are aimed at undoing some of the harm the nation’s decades-long war on drugs has inflicted on poor and minority communities.

Read the full Washington Post article here.

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Attorney General Jeff Sessions may be the biggest anti-marijuana politician since Richard Nixon. Since taking over the Justice Department, Sessions has repeatedly called for a crackdown on states with legalized marijuana and he created a Task Force to study ways to do it.

Mr. Sessions got a disappointing response from his team when the panel came back with a recommendation that more study was needed before they could make any suggestions. In fact, the panel pretty much took a wait and see approach that is consistent with the hands-off policy of the Justice Department under President Obama. After initially suggesting he would continue that hands-off approach, President Trump has remained silent on the subject of legalization.

Sessions recent attacks on Washington State’s legal Marijuana program were called, “Uninformed” and are “…based on outdated information.”

Read the full Seattle Times article here.

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Cannabis Legal Solutions’ own Patrick K. Nightingale has been selected by the Allegheny County (Pittsburgh) District Attorney’s Office to teach his peers in the legal profession about medicinal cannabis. The upcoming Continuing Legal Education (CLE) seminar will be held Friday, August 25 in courtroom 313 at the Allegheny courthouse. There is a $15 fee. Contact Lynn Gettings at 412-350-3110 to register.

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Patients in Pennsylvania are one step closer to to getting the medicine they need. The state has confirmed two training courses for Pennsylvania doctors to get certified to recommend medicinal cannabis to their patients. One is online and one is in person.

Check out this article in The Incline for more information.

 

 

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Vinni BelfioreCannabis Legal News Update 08-07-17
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Patient Advocacy Needs to Take Center Stage

Patrick Nightingale testifying at the Pennsylvania State House.

The passage of Pennsylvania’s Act 16 medicinal cannabis act has generated a lot of interest among the business and legal communities, offering many opportunities for a wide variety of professionals.

And it’s not just growers and dispensaries, either.

Contractors, real estate developers, lighting suppliers, medical equipment manufacturers, staffing agencies and many others have jumped into the game.

This is a multi-million dollar industry that is offering many lucrative business possibilities, yet in the rush to generate profits, it’s important those of us in this rapidly growing field bear in mind why we’re all here: Getting patients medicine they desperately need.

Cannabis Legal Services is literally built on a long track record of patient advocacy. We are extremely proud of the central role founding partner Patrick Nightingale played in bringing Act 16 to life, and it’s important we as a firm continue to be a leading voice defending the rights of patients and their doctors to choose how they treat their medical conditions.

We encourage anyone getting into the medicinal marijuana industry to make patient advocacy central in their core business philosophy.

After all, patients who need medicine are the reason we’re all in this business in the first place.

Mr. Nightingale is available for speaking engagements to assist you in educating your employees and staff.  We’ll offer sound advice and counseling when it comes to patients rights, as well as advice regarding the continually evolving business landscape of Pennsylvania’s Act 16.

Email info@cannabislegalsolutions.net for more information on booking Mr. Nightingale to be a speaker at your next business meeting or event.

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Vinni BelfiorePatient Advocacy Needs to Take Center Stage
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