Cannabis Companies Were Taxed Like Drug Traffickers For Years. A New Federal Order Could Unlock Billions
A new federal order could significantly change the taxation landscape for the cannabis industry. For over two decades, cannabis companies were taxed under a provision meant for drug traffickers, which prevented them from deducting standard business expenses. The recent rescheduling of certain cannabis products may provide relief from this burdensome tax rule.
- ▪The cannabis industry has faced billions in taxes due to Section 280E of the Internal Revenue Code.
- ▪A recent federal order has moved some medical cannabis activities from Schedule I to Schedule III, potentially easing tax burdens.
- ▪Estimates suggest the cannabis industry incurred around $9 billion in income tax expenses attributable to 280E from 2023 to 2025.
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LifestyleVicesCannabis Companies Were Taxed Like Drug Traffickers For Years. A New Federal Order Could Unlock BillionsByJavier Hasse,Senior Contributor.Forbes contributors publish independent expert analyses and insights. Javier Hasse is a cannabis and psychedelics reporter and book author.Follow AuthorMay 22, 2026, 12:00pm EDTMay 22, 2026, 12:17pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.The legal cannabis industry generated billions in revenue for years — and paid taxes on most of it, barred from deducting standard business expenses that every other legal industry takes for granted.gettyA new analysis from GreenWave Advisors shows that a federal tax rule written for drug traffickers has cost the cannabis…
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