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Cannabis Tax Challenges? We Understand 280E.
Cannabis businesses face unique tax burdens that most accountants don't fully understand. Schedule a consultation with attorneys who specialize in cannabis taxation.
IRC 280E Creates a Tax Burden Unlike Anything in Other Industries
Section 280E of the Internal Revenue Code prohibits cannabis businesses from deducting ordinary business expenses — resulting in effective tax rates of 50-80%. This creates a crushing burden that can make profitable businesses insolvent. Most CPAs are not equipped to navigate the narrow exceptions and strategic opportunities that exist within 280E.
Whether you're facing an IRS audit, need to optimize your 280E position, or are dealing with state-federal tax conflicts, specialized counsel is not optional — it's a survival necessity.
- Optimize your 280E position to minimize the impact of disallowed deductions
- Defend against IRS audits targeting cannabis businesses
- Navigate state-federal conflicts in cannabis tax reporting
- Structure operations and entities to maximize allowable cost of goods sold
What to Expect
After You Book Your Call
Not a receptionist or a call center. You'll be speaking with a trained member of our intake team who can meaningfully assess your situation.
We'll discuss your situation, explain what's at stake, and outline the realistic paths forward. If we're not the right fit, we'll tell you that.
The consultation is free and completely confidential. No engagement fees until we've discussed your situation and mutually agreed on a path forward.
How It Works
Three Simple Steps
1
Book
Choose a time that works for you.
2
Talk
15 minutes with our team. No obligation.
3
Plan
We'll map out your options and next steps.
Confidential • No Obligation • Same-Day Available
Common Questions
Cannabis Tax FAQs
What is IRC 280E and why does it matter?
Section 280E denies tax deductions for any business that traffics in controlled substances — which includes state-legal cannabis. This means cannabis businesses can only deduct cost of goods sold (COGS), not operating expenses like rent, payroll, or marketing. The result is effective tax rates 2-4x higher than other industries.
Can I reduce my 280E tax burden?
Yes, through careful structuring. Maximizing COGS allocations, proper entity structuring (separating plant-touching from non-plant-touching operations), and strategic inventory accounting can significantly reduce the 280E impact. These strategies require legal guidance to implement properly.
What triggers an IRS audit for cannabis businesses?
Cannabis businesses are audited at significantly higher rates than other industries. Common triggers include 280E-related deductions, large COGS claims, inconsistent reporting between state and federal returns, and the IRS's general focus on the cannabis industry.
Is cannabis tax going to change with federal legalization?
Potentially. If cannabis is rescheduled or descheduled, 280E would no longer apply. However, the timeline and likelihood are uncertain. We recommend operating under current law while structuring for potential future changes.
Get Started Today
Book Your Free 15-Minute Call
Schedule a brief call with our team to discuss your cannabis tax situation. We understand 280E inside and out — and we'll help you minimize its impact.
- Completely confidential — protected by attorney-client privilege
- Every situation is different — you'll receive a custom assessment tailored to yours
- Same-day and next-day appointments available