Recently, Ritter Spencer’s Chelsie Spencer sat down with Texas based tax attorney Vu Le to discuss cannabis law and its interaction with IRS 280E. As you will hear Vu discuss in the video, Section 280E of the Internal Revenue Code prohibits medicinal and recreational marijuana companies from deducting normal business expenses, such as payroll and monthly rent costs, from gross income.
What is one of the biggest problems facing cannabis businesses today? What to do with the money. Currently, most banks are reluctant to service cannabis businesses as such activity could threaten the bank’s charter since marijuana remains a Schedule I substance federally. Cannabis banking is certainly a risk for a chartered bank. Cannabis businesses cannot generally use credit cards or electronic funds transfers. Cash, which is fraught with risks, is sometimes the only way to operate.
Ritter Spencer Attorney Chelsie Spencer is featured on “Cannabis and Credit Unions: The Opportunities and Risks” podcast with Robert McGarvey, who recently interviewed Ms. Spencer on issues facing credit unions seeking to service cannabis accounts. Mr. McGarvey is an expert in credit union technology and frequently covers issues affecting the credit union industry.