A group of congressional lawmakers are pressing federal officials to issue “prompt guidance” on tax issues for marijuana businesses in light of the Trump administration’s move to federally reschedule cannabis.
A new letter, led by Reps. Steven Horsford (D-NV and Steve Cohen (D-TN), notes that “state-legal cannabis businesses have been denied ordinary business tax deductions and credits due to Section 280E, which prohibits any such deductions for expenditures related to controlled substances listed in Schedules I and II.”
However, now that cannabis has been partially moved to Schedule III, 280E is “no longer applicable to qualifying state-legal cannabis-related trades or businesses,” the lawmakers wrote to Treasury Secretary Scott Bessent and Internal Revenue Service (IRS) Chief Executive Officer Frank Bisignano on Thursday. “This change materially alters the federal tax framework governing the cannabis industry.”
Under an order issued by Acting Attorney General Todd Blanche last month, marijuana regulated by a state medical cannabis license immediately moved to Schedule III. Marijuana products such as those in state-legal recreational markets remain in Schedule I for now, however, subject to a hearing process set to begin next month to consider broader rescheduling of cannabis.
The new letter says that “unambiguous guidance” is needed in
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