420 with CNW – Tax Audit Risks Cannabis Businesses May Be Unaware of Post-Rescheduling
The federal shift in cannabis policy is opening the door to broader tax deductions, but the transition is creating a new set of compliance challenges for businesses operating in the industry. For years, companies dealing with cannabis had limited options under Section 280E of the Internal Revenue Code. Because that provision barred most business deductions, operators generally tried to place eligible expenses within inventory costs, allowing them to recover those amounts through cost of goods sold. That approach was restrictive. Inventory costs could reduce taxable income only when products were sold, while ordinary business expenses, including administrative and corporate costs,…

















