As hopes for federal legislative relief for the cannabis industry begin to fade, the focus has returned to the issue of 280e. In that spirit, MariMed Inc. (CSE: MRMD) (OTCQX: MRMD) surprised crowds at Boston Harbor when they boarded the Liberty Star schooner and reenacted the tea party revolution.
Executives dressed in colonial costumes tossed boxes with the word “weed” overboard instead of tea and chanted anti-280e slogans.
MariMed CEO and President Jon Levine said, “MariMed is among the most sound financial companies in cannabis, with top-selling brands in the markets we serve. Our protest was less about us and more to provide a voice for the entire industry. Section 280E is unfair and hampers companies striving to make cannabis accessible for consumers and medical cannabis patients in all legal states.”
It’s the 250th anniversary of the most famous tax protest in history, the Boston Tea Party. Colonists were angry at paying taxes to the United Kingdom with no representation in the government.
For the uninitiated, Section 280E prevents the deduction of ordinary business expenses associated with “trafficking” a Schedule 1 or 2 controlled substance. As a result of the provision, cannabis businesses pay much more in taxes than they would if it were repealed, according to Wolf & Company.
Levine told Green Market Report that not having the basic business deductions for things like employee costs has made it difficult for companies in the cannabis industry to make a profit. If companies were able to take the deductions, many would be instantly profitable, which in turn would lead to higher stock valuations.
Of course, there is the irony that states happily collect tax money from cannabis companies with no issues that it is a controlled substance.
Some states have opted to circumvent the 280E restrictions, Levine noted, including Massachusetts, Illinois, and Maryland, plus the 17 others that have approved laws providing cannabis businesses relief from 280E.
A growing number of U.S. Congressmen and women are aligned with MariMed’s take on 280E: “State-legal cannabis businesses are denied equal treatment under 280E,” Congressman Earl Blumenauer (D-OR) said earlier this year, referencing it as “grotesquely unfair treatment” and urging his colleagues to “allow legal cannabis operations to deduct business expenses, just like any other industry.”
Lest conservationists worry, MariMed took great pains to note that the sustainable natural wood boxes tossed into the Boston Harbor were empty, floated on the surface, and pulled immediately from the harbor.