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The 280E Tax Code Hurts the Cannabis Industry
Cannabis is still classified as a schedule one drug at the federal level. That means even if you're growing and selling pot legally within a state, federal law treats it as an illegal business. The 280E of the Internal Revenue Code prohibits taxpayers who are engaged in the business of trafficking certain controlled substances from deducting typical business expenses associated with those activities. It's going to ultimately create an environment where social justice and small business can't compete because there is an effective tax rate of 70% in the cannabis space.