Tax and Legal Challenges in the Cannabis Industry with Nick Richards: Part 2

Tax and Legal Challenges in the Cannabis Industry with Nick Richards: Part 2In this episode, Meredith and Judy continue their conversation with Nick Richards, partner and co-chair of the cannabis law group at Greenspoon Marder LLP. They explore the differences between the psilocybin and cannabis industries, specifically focusing on the challenges they face with federal regulations, taxes, and audits. Nick talks about the implications of the federal tax code 280E. He also discusses the economic benefits of marijuana businesses to their local communities, the stigma and education that still need to be overcome for progress to be made, and the potentially life-changing palliative effects of psilocybin for those suffering from terminal illnesses.Topics discussed in this episode:Tax implications for the psilocybin industry Cannabis industry challenges and opportunitiesThe battle against stigma in the psilocybin and cannabis sectorsWhat You Will Learn:01:00 The 280E “add-back”08:37 Stigma and challenges surrounding the use of psilocybin for terminal illness18:27 How tax professionals can help in the cannabis and psilocybin industries Quotables:“The psilocybin industry doesn't want to be compared to the marijuana industry. The problem is that the federal government is going to see them the same and the roadmap that we have, the experience that we have, is from the cannabis industry.” -Nick Richards [00:25]“When the cannabis industry got started, people didn't understand 280E. When 280E showed up, they sort of said that can't be right. Here is the reality of 280E in a very simple example. 280E applies to deductions but not to the cost of goods sold. If I buy a mushroom to sell and I pay $2 for that mushroom and then I pay my salesperson a $2 salary and they sell it for $5, I just made a dollar. But because of 280E, I am not going to be able to deduct the $2 I paid on my salesperson.”  -Nick Richards [02:37]“Because of the way our system works, state tax returns start at line 35 of the federal tax return. So if you're in a company that is subject to 280E, you're going to pay that tax again at the state level because it takes off from line whatever of the local level.” -Judy Vorndran [04:45]“I don't think it is fair to treat a legitimate business like it's not a legitimate business. It's kind of what you're saying Indirectly by disallowing expenses and otherwise, and then regulating and retransferring things that are muddled.” -Nick Richards [10:20]Subscribe on your favorite podcast app:https://saltovation.captivate.fm/listenhttps://linktr.ee/taxops Follow Us on Socialshttps://www.linkedin.com/company/taxops-llchttps://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw Talk To A Tax Advocate TodayTaxOps Website: https://taxops.com/contact/Production SupportThis episode was produced with support from Truth Work Media. www.truthworkmedia.comMentioned in this episode:Schedule a Call with the Aprio Team Now!Introductory Call