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Even though there are record revenues and record state tax receipts, cannabis retailers are struggling.
IRS Section 280e puts a heavy burden of additional federal business taxes on cannabis retail businesses.
The greatest share of business risk is borne by main street: smaller businesses, and women & BIPOC-owned businesses.
IRS Section 280e puts the effective tax rate for cannabis operators at between 60% – 70%. Retailers are hit hardest by this policy.
Data on cannabis retailer sales tax payments in Oregon indicate that retailers are increasingly falling behind on their payments.
On average, retailers are behind nearly $20,000 in state taxes. How will they suddenly be able to pay an annual average of $146,000 in Federal taxes?