Tauhid Chappell’s Post

I think everyone is on board with the concepts and principles behind raising the SEEF tax. We want to reinvest cannabis into the communities that were most affected by its criminalization. But I would encourage the ACLU and other organizations to come learn about what they're pushing for. The operators that the New Jersey Cannabis Regulatory Commission drafted their laws to uplift and get into the industry, are those who will suffer THE most from a jump in tax like this. Minority owners cannot afford this $28+ increase. The laws were written to grow and change with the market. NJ is not a mature market. We are not stable. We cannot afford this drastic of a change. Basing the tax on the 'usable cannabis' ounce average is also horrifically flawed: Trim: $150 Gummies: $300 Vapes (0.5g): $400 Flower: $500 A weighted or modal average would be far more applicable here, as the more expensive items like flower and vapes sell at far higher volumes than trim, pre-ground, and edibles. The state average isn't truly $330 relative to the average customer, nor to the average retailer. These tax increases will not be absorbed by suppliers (cultivators/manufacturers), they will be passed to the retailers who will pass to the consumers. Understand the financial impact this drastic of a change would have on the consumer: Flower (8th) - Current: $60 - SEEF Increase: $68 Gummies: - Current: $32 - SEEF Increase: $38 Vapes (0.5g): - Current: $50 - SEEF Increase: $57.50 The ENTIRE point of legalizing cannabis, developing the CRC, and licensing operators is to offer safe, regulated cannabis for consumers to purchase legally. We want to drive the traditional/legacy market into the legal market. Instead, this increase would drive the majority of customers back to the streets to purchase. Again, we all want those impacted by the war on drugs to be supported properly. We cannot destroy everything we've spent the last 3 years creating to make it happen by some deadline or numbers that are terribly outdated. Good old New Jersey, ladies and gentlemen.

IRS Maintains Schedule I Status for Cannabis Businesses The Internal Revenue Service (IRS) confirmed that marijuana remains classified as a Schedule I controlled substance, maintaining the current tax regulations under Section 280E for cannabis businesses. This classification prevents these businesses from claiming federal tax deductions, a restriction that will persist until federal law changes. Despite recent movements towards cannabis rescheduling, the IRS’s stance remains firm on this matter. Learn more in the caption Section 280E of the Internal Revenue Code disallows all deductions or credits for any amount paid or incurred in carrying on any trade or business that consists of illegally trafficking in a Schedule I or II controlled substance. As the IRS detailed, “Section 280E disallows all deductions or credits for any amount paid or incurred in carrying on any trade or business that consists of illegally trafficking in a Schedule I or II controlled substance within the meaning of the federal Controlled Substances Act.” The Justice Department is currently considering rescheduling marijuana, which could shift its classification from a Schedule I to a Schedule III controlled substance. This change could potentially alleviate some of the tax burdens imposed by Section 280E. However, until such a final rule is published, the current tax restrictions remain in place. The IRS’s recent statements highlight the importance of understanding and complying with existing federal tax laws until any official changes are enacted. Read the full article here at: https://lnkd.in/e8pXdxRf

California's tax-on-tax complexity often leaves cannabis business owners dizzy. It's not tough to see why. The concept of taxing a tax, and then taxing that tax again, sounds baffling— but it's a reality that legal cannabis businesses face daily in #California. In contrast, #Missouri's simplified tax approach offers relief but not without nuances. Counties are subtly increasing taxes, signaling a trend that's easy to overlook but impactful on a local scale. This juxtaposition underscores a broader discussion in cannabis, in the balance between #taxrevenue and #business viability. In our article below, my colleagues and I go beyond surface-level comparisons, offering our insights on how tax stacking effects us all in cannabis. For cannabis businesses feeling lost in the tax maze, our team at #420CPA is ready to guide you through. Reach out to Stephanie Jeffries on our #BizDev team to learn how we can help. #420CPA #cannabis #taxstacking #cannabistax

*Breaking* Enacted Budget cannabis provisions. Please note that not all bills are printed and additional provisions may be included in other bills Revenue Part L: Huge win for the supply side with the repeal of the potency tax and its replacement with a flat excise tax of 9%. This new tax rate takes effect for sales on and after June 1, 2024 PPGG Part G: Enforcement against illicit cannabis. Many significant provisions. Highlights include authorizing NYC sheriff to conduct regulatory inspections, seize product, seal a building (padlock); authorize municipalities to adopt local laws to conduct inspections of places selling cannabis, to establish procedures for hearings on inspection, to levy penalties on illegal sales found pursuant to inspection (max penalty $25k), to seize illegal product and seal a building; authorizes additional persons (county attorney, corp counsel, or local govt) to seek a TRO, injunction or closing order; requires defendants to provide certain information in response to an order to show cause; authorizes enforcement official to seize cash upon a closing order or TRO; and authorizes OCM to seek information from defendants in response to a demand for information These are highlights! There is nuance in the language that I encourage everyone to read

It's Tax Day for many companies -- and a reminder that 280E continues to weigh down on so many cannabis businesses. Every day, I see firsthand how the inability to write off basic expenses -- deductions that ANY other company can take advantage of -- puts plant-touching companies in a bind. Imagine how much good that extra cash flow can do each month. For some operators it can be the difference between profitability, and failure. It feels to me as though cannabis companies are unfairly punished for their participation in a state-legal business. We need rescheduling now to end 280E. #taxday #cannabusiness #businessinsights #280E #taxes

The AICPA is asking the U.S. Department of the Treasury and the Internal Revenue Service to issue new guidance to cannabis businesses and tax preparers in anticipation of a change to marijuana’s classification to a Schedule III controlled substance instead of a Schedule I, according to a recent letter. The change could provide some tax benefits because businesses that handle Schedule I substances are prohibited from taking tax deductions under Section 280E of the Internal Revenue Code. #cannabisindustry #cannabis #accounting https://lnkd.in/gpD-c4TQ

Everyone wants to know where the Maryland cannabis tax revenues go. According to the latest Cannabis Quarterly Update from Maryland Comptroller Brooke Lierman, Maryland collected $22.4 million in cannabis taxes from April to June 2024, marking a 52 percent increase compared with revenue collected in Q1 of 2024. Despite this surge, local governments still receive only a tiny portion of the revenue. Why it matters: Adult-use cannabis in Maryland carries a 9 percent sales tax, which supports several State funds. Local governments, however, receive just 5 percent of that revenue, among the lowest shares nationwide.

It's always great to see improvements in tax #policies for #cannabis operators in difficult markets. Hopefully more states will learn from these mistakes and avoid the "potency tax" moving forward! What do you think about this move and the NY cannabis industry as a whole? Comment below!

Wondering what to expect from cannabis rescheduling? 🔍🌱 Here’s our latest featured content from 420 CPA on the potential impacts for cannabis businesses, co-authored with my colleague Simon Menkes. Cannabis moving from Schedule I to III could significantly reduce #federaltax burdens for the industry. However, our analysis shows this rescheduling process will be lengthy, with continued 280E impacts likely through 2024 tax filings. 🗓️ While rescheduling promises lower taxes eventually, proper planning is key to future savings. It could also pave the way for #banking access and interstate #commerce. Read below for further insights on how to navigate these upcoming changes and position your #cannabisbusiness for success. 🌟 Follow 420 CPA for more expert guidance on cannabis tax and finance strategy as regulations evolve. #420CPA #cannabis #taxes #rescheduling #280E #cannabisfinance

Cannabis tax complexities require insight and adaptability through the regulatory shifts. The introduction of a wholesale #excisetax, as seen in New York's recent policy evolution, presents both challenge and opportunity. Adding predictability, it allows strategizing with more certainty. However, excise tax structures differ greatly across state markets. This highlights the difference a tailored and informed approach can make in financial planning in cannabis. Leverage lies in uncovering new opportunities, before and as they emerge. At #420CPA, we decode the intricacies in cannabis, turning tax challenges into financial opportunities for our clients. In this article, my colleagues and I examine the impact this tax shift could have on streamlining compliance and strengthening the legal #adultuse market in NY. Read on in the link below to learn more about the state's evolving market and the proposal initiated by Governor Kathy Hochul. For expert help with your cannabis tax strategy, connect with our Biz Dev team at [email protected] to learn how we can create opportunities together. #420CPA #cannabis #cannabisfinance