featured
Marijuana Companies Are Blocked From COVID-Era Employee Retention Tax Credits Under 280E Penalty, Federal Court Says

Published
2 months agoon

In yet another wrinkle stemming from the ongoing federal prohibition on marijuana, a U.S. district court has ruled that an Internal Revenue Service (IRS) tax rule prevents state-legal cannabis companies from being eligible for refunds of employee retention credits (ERCs), which helped businesses continue to pay workers during early COVID-era shutdowns.
In the decision, the U.S. District Court for the Western District of Washington ruled that “nothing in the plain text of [IRS code] Section 280E limits its application to income tax credits,” rejecting arguments from plaintiffs.
The government, meanwhile, contended that the Section 280E prohibits any and all tax credits, including refunds of the COVID-era ERCs, which are typically refundable for other businesses.
On May 9, the court granted the government’s motion to dismiss the the case, Solstice Holdings v. U.S.
Section 280E disallows standard tax deductions and tax credits for businesses that traffic in Schedule I or II substances. It applies even in cases where businesses are operating in compliance with state law.
The law firm Holland & Hart said in a post about the new ruling that it appears to be “the first case where a court has addressed the application of IRC § 280E to ERC.”
Another law firm, GreenspoonMarder, noted in post about the district court opinion that many cannabis businesses applied for the ERC during the pandemic—and many received it.
“Some were deemed ‘essential’ and had to stay open during the pandemic despite the higher costs associated with continued operations during the pandemic and various restrictions that rendered it much more difficult to visit their stores,” attorneys Nick Richards and Sabrina Strand wrote recently.
“When the ERC first came out, there was a question as to whether it was available to cannabis companies because it creates a tax credit that Section 280E may disallow,” the post points out. “There was also an argument that it didn’t apply to the ERC, because Section 280E is part of Section A of the [Internal Revenue Code], which concerns income rather than employment taxes. At least one court now disagrees.”
Both law firms suggest the case out of Washington State creates a standard across all states within the jurisdiction of the U.S. Court of Appeals for the Ninth Circuit. GreenspoonMarder, for example, says the ruling “technically only applies to companies located in the 9th Circuit.”
“That said, as the only opinion on this subject,” lawyers wrote, “the IRS may look to it as authority regardless of whether taxpayers are in one of the nine states located in the Circuit.”
Notably, as a district court case and not a published appellate opinion, the ruling has limited impact outside the immediate dispute and is not binding on other courts. That said, it’s the one indicator so far of how courts might rule in similarly situated cases.
Separately, late last year IRS warned the marijuana industry that some cannabis companies had, without a “reasonable basis,” filled out a supplementary form in an attempt to take federal tax deductions that they’re prohibited from receiving under 280E.
In that notice, IRS said certain firms were attempting to circumvent the federal ban by completing the disclosure statement Form 8275. That form is “used by taxpayers and tax return preparers to disclose items or positions, except those taken contrary to a regulation, that are not otherwise correctly disclosed on a tax return in order to avoid certain penalties,” the agency said.
State-licensed cannabis businesses could be able to start taking broader federal tax deductions if the push to move marijuana to Schedule III is ultimately successful. But IRS separately advised last June that just because that possibility is on the horizon doesn’t mean the industry can start claiming deductions in the interim.
Multiple states have taken steps to provide state-level tax relief to marijuana businesses that are subject to the IRS 280E statute, but the federal rule has not yet changed. And it’s unclear when the proposed federal marijuana rescheduling rule might take effect. An administrative hearing process concerning the rule is currently underway.
In 2023, then-Rep. Earl Blumenauer (D-OR) reintroduced a congressional bill that would amend the IRS code to allow state-legal marijuana businesses to finally take federal tax deductions that are available to companies in other industries.
The latest notices come three years after the Congressional Research Service (CRS) noted in a 2021 report that the agency “has offered little tax guidance about the application of Section 280E.”
IRS did provide some guidance in an update in 2020, explaining that while cannabis businesses can’t take standard deductions, 280E does not “prohibit a participant in the marijuana industry from reducing its gross receipts by its properly calculated cost of goods sold to determine its gross income.”
The IRS update seemed to be responsive to a Treasury Department internal watchdog report that was released in 2020. The department’s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to “develop and publicize guidance specific to the marijuana industry.”
Read the court’s ruling below:
Do Cannabis Companies Really Have To Wait for Rescheduling To Escape The 280E Tax Penalty? (Op-Ed)

Author: mscannabiz.com
MScannaBIZ for all you Mississippi Cannabis News and Information.
You may like
-
MORE POT ON THE WAY FOR ’87 (1986)
-
Man arrested after marijuana found during East Nashville traffic stop
-
City officials to consider repealing medical marijuana moratorium
-
Texas hemp ban advances as new cannabis legalization bill is filed (Newsletter: July 31, 2025)
-
Man who traded alcohol, marijuana for teens’ nude photos, gets lengthy prison sentence
-
Not All Terpenes Are Created Equal

Original publication: November 1986.
MORE POT ON THE WAY FOR ’87
JORGE CERVANTES

Whew! The summer marijuana drought is over! The law of supply and demand drove the summertime marijuana price sky high. This scarcity created a run on last year’s harvest of quality outdoor buds. As soon as the pot surfaced on the street, it was sold and smoked. This phenomena is similar to what happens when depositors learn their bank is running out of money; the depositors run to withdraw all of their savings. In this case, the savings go up in smoke.
For the third consecutive year the Campaign Against Marijuana Planting (CAMP) contributed to a lighter harvest and higher marijuana price. CAMP aided local law enforcement agencies in staging marijuana eradication raids all across the United States. As well as harvesting an enormous amount of wild Midwestern fibrous “no high” hemp plants, they confiscated thousands of marijuana plants cultivated by guerilla growers.
Sound bad? Not really. CAMP claims to have harvested a larger percentage of the 1985 marijuana crop than is humanly possible. CAMP releases their own facts and figures and the sad fact is, they believe their own news releases. For example, CAMP claims to have eradicated over 90% of the California marijuana crop. Is it possible to eradicate over 90% of the nation’s most valuable cash crop in the largest agricultural state in the Union? I doubt it.

According to the 1985 “Annual Marijuana Growers Survey” by Sinsemilla Tips Magazine (Vol.5, #4), approximately 11% of the crop was confiscated by the law. As much as 16% might have been stolen by thieves. This actual survey of real growers gives thieves more credit for cheating the growers out of their mature harvest than law enforcement officials. The choice is yours: which set of “facts” sounds more believable to you?
Guerilla growers now raise fewer, more potent plants in well camouflaged patches. These varieties of marijuana produce heavier, more potent yields on more compact plants. Now the harvest of 1986 is coming in. More marijuana will be available this year because there is more of it being grown than last year, just like the year before.
Marijuana imports have slowed to a crawl. One reason: cocaine. This powder is much easier and more profitable to smuggle than marijuana. Cocaine sells for ten times as much and weighs only a fraction as much as marijuana, making it easier to conceal and transport. The penalties are essentially the same for the illegal importers. Consequently, smugglers find cocaine rather than marijuana to be the most profitable contraband.
There is such a glut of cocaine on the US market that the new highly addictive “crack” has won a firm place in the market.
Colombia claims to have eradicated over 85% of its marijuana fields. Nowhere is it ever mentioned that the cocaine traffic has simply replaced the marijuana traffic. This summer, authorities confiscated thousands of pounds of cocaine in Colombia. The U.S. Drug Enforcement Administration (DEA) was elated. They waited for an increase in the street price of cocaine to signify the impact of the largest coke bust in history.
To the DEA’s chagrin, there was no change in the supply or price of cocaine in the United States.

Smart domestic growers have seen the writing on the wall. To quote from Newsweek magazine (August 4,1986, p. 16) “A pound of high-grade California sinsemilla, available on the East Coast for $2,000 last year, currently sells for $5,000.” This price seems inflated to me, but I’ve heard numerous rumors from many cities that people are literally begging for more $3,000 pounds!
Look for higher prices in the 1986-87 harvest season. Last year, at the peak of the harvest season, the growers’ rock bottom wholesale price was $1800 per pound, in quantity. This year that base price will probably be in the $2,000 to $2,500 per pound range.
This year, the growers’ answer to CAMP is: “If CAMP is looking for marijuana, let them find marijuana. Let them try to find it all. We will always harvest some of the crop. It is easier to plant hundreds of plants than it is to find and destroy them.”
This year, I believe we will realize an actual 2-10% increase in domestic marijuana production over 1985. However, this harvest will have to supply a much larger demand. The wholesale and retail price will increase. More people will start growing at home, both indoors and outdoors, to help cut expenses and take advantage of the higher market price. Strange: the intent of the DEA and CAMP was to eradicate marijuana. But by their restrictive actions, these agencies are creating artificially high prices and promoting more domestic production.
The ’86 harvest is coming in, and more marijuana will be available this year because more of it is being grown than last year.

Author: mscannabiz.com
MScannaBIZ for all you Mississippi Cannabis News and Information.
featured
Texas hemp ban advances as new cannabis legalization bill is filed (Newsletter: July 31, 2025)

Published
8 hours agoon
July 31, 2025
Anti-marijuana group’s anti-rescheduling ad campaign targets Trump; DE legal sales launch; Slovenian cannabis bills; GA hemp & medical marijuana study
Subscribe to receive Marijuana Moment’s newsletter in your inbox every weekday morning. It’s the best way to make sure you know which cannabis stories are shaping the day.
Your support makes Marijuana Moment possible…
Before you dig into today’s cannabis news, I wanted you to know you can keep this resource free and published daily by subscribing to Marijuana Moment on Patreon. We’re a small independent publication diving deep into the cannabis world and rely on readers like you to keep going.
Join us at https://www.patreon.com/marijuanamoment
/ TOP THINGS TO KNOW
The Texas Senate approved a bill to ban consumable hemp products with any amount of THC even though Gov. Greg Abbott (R) recently vetoed similar legislation.
A Texas senator filed legislation to regulate, rather than ban, hemp products—and also introduced a separate bill to legalize recreational marijuana.
Prohibitionist organization Smart Approaches to Marijuana Action is launching a TV ad campaign urging President Donald Trump not to reschedule cannabis—claiming it “harms American public health” and would “give cartels a tax break.”
Slovenian lawmakers filed a bill to legalize recreational marijuana as separate medical cannabis legislation is advancing toward enactment.
Delaware recreational marijuana sales will start on Friday through existing medical cannabis dispensaries, and Gov. Matt Meyer (D) is sharing resources to inform consumers about how the state’s program works.
The Georgia House Blue-Ribbon Study Committee on Georgia’s Medical Marijuana and Hemp Policies held its first hearing, with the chair noting that “there is some blurring in this committee, which happens because of the fact that we’re looking at, really, two different policies.”
/ FEDERAL
Customs and Border Protection tweeted, “Marijuana is a controlled substance under U.S. federal law. The sale, possession, production, distribution or the facilitation of both medical and recreational marijuana is illegal. Crossing the border or arriving at a U.S. port of entry with marijuana may result in seizure, fines, and/or arrest, and may impact admissibility.”
/ STATES
A North Carolina representative’s hemp company filed a counterclaim against other businesses that alleged it used his political influence to coerce them into a bad deal.
A Pennsylvania senator shared a former Colorado Senate majority leader’s op-ed in support of marijuana legalization.
New York regulators are being sued over allegedly unreasonable delays in processing a company’s marijuana retail license application.
Massachusetts regulators approved draft cannabis cafe rules.
Tennessee regulators filed proposed changes to hemp rules.
Minnesota regulators published updated guidance on cannabis events.
California regulators are extending the deadline for cannabis-related academic research grant proposal submissions.
Missouri regulators sent a newsletter with updates on various cannabis issues.
—
Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
—
/ LOCAL
A former Jackson’s Gap, Alabama police chief authored an op-ed supporting federal marijuana rescheduling.
/ INTERNATIONAL
The Switzerland National Council’s Social Security and Health Committee approved cannabis legalization legislation.
Australia’s health minister said he is “deeply concerned about unscrupulous and possibly unsafe behaviour by some telehealth medicinal cannabis providers.”
/ SCIENCE & HEALTH
A study found that “CBD demonstrated a good safety and tolerability profile and appeared to be a promising therapeutic option for the management of” drug-resistant epilepsy.
A review concluded that “psilocybin, LSD, and ayahuasca revealed preliminary therapeutic potential for facilitating smoking cessation.”
/ ADVOCACY, OPINION & ANALYSIS
The Maine Public Health Association is working on legislation to require testing of medical cannabis.
The Boston Globe editorial board is urging the Cannabis Control Commission to move past a “toxic culture” depicted in newly released documents.
/ BUSINESS
Apothecarium workers in Cumberland, Maryland are “reporting serious health symptoms following exposure to paint fumes inside the facility.”
RiverBank and Green Check launched a direct-to-bank integration partnership.
Compass Pathways plc has a new board of directors member.
Make sure to subscribe to get Marijuana Moment’s daily dispatch in your inbox.
Photo courtesy of Chris Wallis // Side Pocket Images.

Author: mscannabiz.com
MScannaBIZ for all you Mississippi Cannabis News and Information.

There continues to be a proliferation of overdried cannabis in legal markets caused by factors ranging from poor drying and curing environments and/or practices to purposeful rapid overdrying to minimize bacterial or fungal contamination risk.
When adding these practices to an already flooded market with a slow retail turnover rate, the result is a backlog where freshly harvested cannabis sits in warehouses while older and older harvests get shipped out. And as dried cannabis ages, it inevitably diminishes in quality as terpenes degrade and evaporate.
As a rule of thumb, I consider dried raw cannabis buds to be a perishable item with a shelf life of approximately one year if stored in a cool, dark environment. This can be extended if the sealed containers are stored in a sub-zero freezer until ready for delivery to the point of sale. I have certainly seen incredible cannabis that was over a year old, but it had been properly stored and cared for.
Terpene Frenzy
With the increase of older and/or overdried cannabis, there has been a steady rise in both non-cannabis-derived and cannabis-derived terpenes in multiple forms being produced and distributed to cannabis and hemp growers.
The proliferation of terpene additives is accompanied by gizmos and gadgets designed to facilitate their application to terpene-devoid cannabis buds. These applicators range from plastic sprayers to pressurized chambers designed to deeply infuse the terpenes into the plant material.
It is fairly well-known (and often mentioned on packaging and in marketing materials) that many vape products utilize added terpenes. But their usage is spreading beyond concentrates. I asked one of the largest steam-distilled, cannabis-derived terpene producers who its largest customer was: It was one of the largest greenhouse growers in the state, who infused the terpenes into the cannabis destined for its pre-rolled joints.
Despite the efforts, I am of the opinion that you can’t fix broken, and terpene-devoid cannabis is broken. Why would someone overdry and evaporate existing terpenes, to in turn reapply alternative terpenes? Sounds like a pointless exercise, as terpenes are compounds that work together with a multitude of cannabinoids. It’s this combination that is responsible for the entourage/synergistic effects with the human endocannabinoid system.
Not All Terpenes Are Created Equal
Terpenes are natural aromatic compounds that are responsible for both the aroma and flavor characteristics in cannabis, other plants, animals, beers, and everything in between. As of 2017, more than 560 unique chemical constituents have been identified in cannabis, with more than 100 unique cannabinoids and more than 150 individual terpenes noted.
So, where are terpenes available for use on cannabis sourced from today?
- Food-grade terpenes: Typically derived from plants and fruits through steam distillation or hydro-distillation. Steam-distilled cannabis-derived terpenes are available for sale but will often lack the vibrancy of the oils collected that were not subjected to heat.
- CO2-extracted fractionalized terpenes: CO2-derived cannabis terpenes pale in comparison to other extraction methods. CO2 extractors often utilize dried cannabis as their input material, which has minimal terpene content to start with.
- Thin-film distilled cannabis-derived terpenes: This process utilizes heat, which degrades and converts terpenes.
- Rosin sauce: Rosin is melted, and cannabinoids and terpenes are separated under vacuum. These terpenes are utilized in rosin vape cartridges.
- Cannabis-derived hydrocarbon extract: This process yields a sauce separating THCA from the remaining cannabinoids and terpenes. These terpenes are also predominantly utilized in vape carts and sometimes added to flavorless distillates for use in vape carts.
Each of these terpene types contains essential oils to varying degrees.
The term essential oil is a contraction of the original “quintessential oil” derived from the Aristotelian concept that matter is composed of four elements, specifically air, fire, water, and earth. The fifth element, or quintessence, was considered to be the “spirit” or “life force.” Distillation and evaporation were thought to be the processes of removing the spirit or life force from the plant. This is also reflected in modern language when we use the term “spirits” to describe alcoholic beverages.
This analogy may be more fact than metaphor, as headspace measurement technology makes it possible to detect the volatile components of the plant’s “aura.”
Aromatic Complexities
Fresh bud oil is comprised mainly of monoterpenes (92%) with 7% sesquiterpenes and approximately 1% other chemical classes such as simple ketones, esters, and thiols. Not unexpectedly, drying the plant material resulted in an overall reduction in the percentage of the oil recovered. Most of the loss appears to take place during the first week of drying. Drying results in a significantly greater loss of monoterpenes than of sesquiterpenes.
As of yet, it has been nearly impossible to recreate the aromatic potential of the more than 150 known cannabis terpenes using just a few food-grade terpenes. They are predominantly sold as single terpene compositions—pinene, limonene, linalool, etc.
The steam distillation process alone destroys and converts the original terpene composition from the original plant material, meaning these single terpene compositions are not even a true representation of their source. The most aromatic extractions occur at or below ambient temperatures, which prevents thermal degradation.
Even cannabis-derived terpenes have their limitations. CO2 extraction utilizes dried plant material, where a percentage of terpenes is already lost during drying. Another portion is then lost during CO2 recovery.
The resulting extract from steam or hydro-distillation is compromised by heat, and a percentage of water-soluble terpenes is lost to the water.
Thin-film distillation also leverages heat, compromising the resulting extract. Additionally, the initial extraction process might isolate only a fraction of the terpenes present in the fresh bud.
Priority Check
Rather than reinfusing a lesser quality essential oil/terpene, which will ultimately result in poor-quality final products, perhaps the efforts could be better spent properly drying and curing the buds with emphasis on terpene preservation and retention. This includes better protocols and infrastructure for long-term storage, as it is likely to take years for stored inventories to normalize.
This way, we might see more cannabis products with well-preserved souls and auras, which would be a refreshing change of pace.

Author: mscannabiz.com
MScannaBIZ for all you Mississippi Cannabis News and Information.

MORE POT ON THE WAY FOR ’87 (1986)

Man arrested after marijuana found during East Nashville traffic stop

City officials to consider repealing medical marijuana moratorium

Texas hemp ban advances as new cannabis legalization bill is filed (Newsletter: July 31, 2025)

Man who traded alcohol, marijuana for teens’ nude photos, gets lengthy prison sentence

Not All Terpenes Are Created Equal

Office of Cannabis Management responds to Albert Lea City Council’s vote against first pot shop

Pennsylvania Democratic Lawmakers Make Another Push To Legalize Marijuana With State-Run Stores

OCM enforcement change threatens cannabis dispensaries

ICE Raids, Texas Hemp THC Ban, Federal Bills Lead CBT Top Stories in July

Recreational marijuana sales begin in Delaware on Friday

Trump’s VA Secretary Touts How He ‘Opened That Door’ To Psychedelic Therapy For Veterans

Inside efforts to reclassify marijuana

Happy Eddie: From reality TV to real-life cannabis reform

Klutch Cannabis Opening Flagship Cleveland Dispensary Aug. 1

Bipartisan Senators Say Deal On Hemp Is Within Reach As New Amendment To Ban Synthetic Cannabinoids Is Filed

Fake Cannabis Licenses Sold to Roughly 70 Businesses in Connecticut

Government-Backed Study From Japan Finds No Evidence That Marijuana Is A ‘Gateway Drug’

Delaware Governor Tours Cannabis Cultivation Facility Ahead of Adult-Use Launch

Skill games, marijuana a sticking point in Pennsylvania’s budget negotiations: This Week in Pennsylvania

Critics Slam Australia’s Medical Cannabis Crackdown as Misleading

Delaware Governor Tours Marijuana Grow Ahead Of Friday Sales Launch, Saying State Will Produce ‘The French Wine Of Weed’

Owner of Albert Lea store with rejected cannabis business license speaks out | Video

Ohio Cannabis Retailer The Botanist Opens Solon’s 1st Dispensary

Alert: Department of Cannabis Control updates data dashboards with full data for 2023

Connecticut Appoints The US’s First Cannabis Ombudsperson – Yes there is a pun in there and I’m Sure Erin Kirk Is Going To Hear It More Than Once!

5 best CBD creams of 2024 by Leafly

EU initiative begins bid to open access to psychedelic therapies

Free delta-9 gummies from Bay Smokes

New Study Analyzes the Effects of THCV, CBD on Weight Loss

5 best autoflower seed banks of 2024 by Leafly

May 2024 Leafly HighLight: Pink Runtz strain

Curaleaf Start Process Of Getting Their Claws Into The UK’s National Health System – With Former MP (Resigned Today 30/5/24) As The Front Man

Mississippi city official pleads guilty to selling fake CBD products

Discover New York’s dankest cannabis brands [September 2024]

Local medical cannabis dispensary reacts to MSDH pulling Rapid Analytics License – WLBT

Press Release: CANNRA Calls for Farm Bill to Clarify Existing State Authority to Regulate Hemp Products

Horn Lake denies cannabis dispensary request to allow sale of drug paraphernalia and Sunday sales | News

Nevada CCB to Accept Applications for Cannabis Establishments in White Pine County – “Only one cultivation and one production license will be awarded in White Pine County”

5 best THC drinks of 2024 by Leafly

The Daily Hit: October 2, 2024

6 best CBD gummies of 2024 by Leafly

5 best delta-9 THC gummies of 2024 by Leafly

Weekly Update: Monday, May 13, 2024 including, New Guide for Renewals & May Board meeting application deadline

People In This State Googled ‘Medical Marijuana’ The Most, Study Shows

PRESS RELEASE : Justice Department Submits Proposed Regulation to Reschedule Marijuana

Thailand: Pro-cannabis advocates rally ahead of the government’s plan to recriminalize the plant

Press Release: May 9, STIIIZY and Healing Urban Barrios hosted an Expungement Clinic & Second Chance Resource Fair
Trending
-
California Cannabis Updates1 year ago
Alert: Department of Cannabis Control updates data dashboards with full data for 2023
-
Breaking News1 year ago
Connecticut Appoints The US’s First Cannabis Ombudsperson – Yes there is a pun in there and I’m Sure Erin Kirk Is Going To Hear It More Than Once!
-
best list1 year ago
5 best CBD creams of 2024 by Leafly
-
Business11 months ago
EU initiative begins bid to open access to psychedelic therapies
-
Bay Smokes1 year ago
Free delta-9 gummies from Bay Smokes
-
cbd1 year ago
New Study Analyzes the Effects of THCV, CBD on Weight Loss
-
autoflower seeds10 months ago
5 best autoflower seed banks of 2024 by Leafly
-
California1 year ago
May 2024 Leafly HighLight: Pink Runtz strain