A pair of Republican lawmakers sent a letter to the Trump administration’s treasury secretary on Wednesday saying they are “concerned” and “troubled” that marijuana businesses will be eligible for tax relief now that cannabis is being partially rescheduled under federal law.
Moving marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III will have “significant implications for the federal tax treatment of marijuana businesses,” Sen. James Lankford (R-OK) and Rep. Jodey Arrington (R-TX), who chairs the House Budget Committee, wrote in a letter to Treasury Secretary Scott Bessent.
That’s because an Internal Revenue Service code known as 280E, which has prevented them from taking ordinary tax deductions and credits that are available to most businesses, only applies to Schedule I and II substances.
“We have long been concerned about the potential fiscal and societal consequences of rescheduling,” the GOP lawmakers said, citing legislation that previously introduced called the No Deductions for Marijuana Businesses Act that would continue to prevent the cannabis industry from escaping the 280E penalty even under rescheduling.
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
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