The Internal Revenue Service (IRS) has denied a marijuana-focused tourism organization’s request for nonprofit tax-exempt status, citing the ongoing federal criminalization of cannabis and saying that the group’s activities create a “private benefit to the cannabis industry” and its members.
Therefore, the agency said, the organization cannot claim tax exemptions for charitable purposes.
In a notice to the group that IRS made publicly available, the agency said the articles of incorporation (AOI) that were submitted to qualify as a tax-exempt nonprofit corporation stated that the organization’s purpose was to “promote the development of a responsible cannabis-related tourism industry, and advocate for sustainable innovations and social equity.”
“Your application stated you aim to accomplish your purpose by engaging in education, training-workforce development, and outreach partnerships,” the notice, which was posted in a redacted form that does not show the group’s name, said. “One of your goals, per your website, is to cultivate local partnerships that can grow cannabis-related economic development opportunities…through education and training.”
IRS said a review of the organization’s website shows that it planned to “utilize a portion of local abandoned buildings to create a vertically integrated farming entity through seed-to sale operations to cultivate an economy around cannabis
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