Filtered by tag "Taxes"

Considerations for Cannabis Stakeholders in Light of Harborside Health Center Decision

Considerations for Cannabis Stakeholders in Light of Harborside Health Center Decision By Selvan Boominathan, Manager, National Tax Services, for CohnReznick Late last year, the Tax Court published its opinion in Patients Mutual Assistance Collective Corp. (d.b.a. Harborside Health Center) v. Commissioner, 151 T.C. 11 (2018). Harborside is a medical cannabis dispensary operating legally under [...]
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Back to Basics: Laurel Alterman and William A. Gibson v. Commissioner of Internal Revenue

By Greg Pelucacci, CohnReznick senior associate In the rapidly growing industry of cannabis, there are several important concepts for owners to understand. One of the most popular topics would be Internal Revenue Code (IRC) Section (§) 280E: Passed in 1982, that code section prohibits companies that traffic Controlled Substances Act (CSA) Schedule I or II […]
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Growth Strategy for the Green Ocean

Setting a new path for market entry into the cannabis industry Cannabis operators who want to shape the future of legal consumption in the United States want to create innovative new products, reach broad new customer sets, and promote positive uses for cannabis to meet the $80 billion market opportunity the industry is chasing. While cannabis […]
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Up in Smoke: Alpenglow Botanicals, LLC V. United States

Challenging IRS authority to deny “ordinary and necessary” business expense deductions By Tosin Hassan, CPA, CohnReznick In the words of Lauryn Hill, “It’s funny how money changes a situation, miscommunication leads to complication.” With the explosion of cannabis businesses across the country, many business owners are not profitable because of significant tax bills impacting cannabis […]
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Beware! Are you in compliance with your cash payments?

By Mary Amato, CPA, Partner, CohnReznick It is no secret that the Internal Revenue Service (IRS) is aggressively auditing cannabis businesses. The focus is on more than the limitations placed on the industry by IRC §280E. The IRS aggressively audits non-compliance of Reporting of Cash Payments. Form 8300, is not an income tax reporting form. […]
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Questions and Answers with an Original Licensee Holder

A discussion of growing pains, regulations, and current product investments By Michael Harlow, CPA, Partner CohnReznick Partner Michael Harlow:  Brian, you were one of the first operational dispensaries in Colorado. What is the single largest difference between the early days and now? Brian Rogers: We started in 2009 with one of the first medical marijuana […]
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How Cannabis Industry Participants Would Benefit if 280E is Rolled Back

By Michael Harlow, CPA, Partner 280E is the Internal Revenue Code section that has been the focus of every tax discussion related to the cannabis industry for the past 15 years.  It is the Code section that prohibits cannabis companies from deducting any ordinary and necessary business expenses from gross profit when calculating federal taxable […]
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Planning for the Coming Consolidation in the Cannabis Industry

By Michael Harlow, CPA, Partner In today’s Cannabis marketplace, we continue to hear one overarching theme.  The industry buzz on everyone’s lips is about “the future consolidation of the industry. This is driven by several factors: strong customer and revenue growth for retailers, price compression for wholesalers, an expected change in the legal landscape, new […]
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Cannabis Businesses’ Bane of 280E

By Michael Harlow, CPA, Partner What We Have Learned: Ancillary, non-plant-touching businesses in the industry enjoy a variety of federal and state tax opportunities and incentives often not utilized to maximum benefits. To quote Benjamin Franklin, “In this world nothing can be said to be certain, except death and taxes,” and people in the cannabis […]
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What Proposed Tax Cuts Mean for Cannabis: Only a Bill?

By Selvan Boominathan, JD, LLM What We Learned:  A December 2017 review of the proposed Republican tax cuts suggested how politicians would not touch 280E, but still help the legal cannabis industry. In a prior post, we discussed how federal income tax applies to cannabis businesses and the huge burden imposed by Section 280E.  You […]
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