| Ticker | Status | Jurisdiction | Filing Date | CP Start | CP End | CP Loss | Deadline |
|---|
| Ticker | Case Name | Status | CP Start | CP End | Deadline | Settlement Amt |
|---|
| Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
|---|
"When you own a cannabis license under some trafficking law, you have a very punitive tax liability," said David Van Vlierbergen, CFO and co-founder at Fernway as he stood alongside Anthony Coniglio, founder, president and CIO of NewLake Capital Partners Inc (OTCQX:NLCP) at the Benzinga Cannabis Capital Conference in Miami.
"It’s encumbering every operator in a lot of ways,” continued Van Vlierbergen, who with Fernway CEO and co-founder Kit Gallant, are featured speakers at the upcoming Benzinga Cannabis Capital Conference in Chicago. Mark your calendar for September 27-28.
Related Content: Why Do Cannabis Companies Pay So Much Tax? Blame A Drug Dealer From The 70's
To the audience's surprise, the conversation took a historical detour. “In a little fun fact, what happened was—I forget the criminal—but there was an offense that the IRS couldn’t go after because he had an illegal business. I think he actually won," Coniglio said.
Pausing momentarily for effect, he continued, "So then Congress enacted this rule 280E which says even if you have an illegal business, you still have to report your income taxes. But we’re going to limit the deductions you can take. So we’re going to penalize you. We’re going to take a lot more of your money and get a very high effective tax rate.”
For many cannabis entrepreneurs, Section 280E of the Internal Revenue Code has been a looming shadow, constricting business growth and innovation. It’s a provision that prevents businesses that buy or sell controlled substances from deducting most of their business expenses. For cannabis businesses operating legally under state laws, this federal law is a significant hurdle.
Capturing the sentiments of many in the room, Maureen Meehan, Benzinga editor, said, “So it’s a newer form of taxation without representation, basically.” A statement that Coniglio wholeheartedly agreed with as he responded, “Yes, yes. Yes, you’re for president.”
Van Vlierbergen and Coniglio did more than just grace the stage; they demystified a thorny issue that has become a central theme in cannabis business operations. Their lively banter and insights illuminated the regulatory grey areas, shedding light on the broader challenges faced by the budding cannabis industry.
Related Content: EXCLUSIVE - Federal Agency Calls For Relaxed Marijuana Laws: Experts Explain What This Means
The Benzinga Cannabis Capital Conference, known for its trail of insights and revelations, promises more enriching encounters in its next edition. As Miami’s event left attendees buzzing with anticipation, the conference is now gearing up for its grand return to Chicago on September 27 and 28. Dive deeper into this reservoir of knowledge by visiting bzcannabis.com
IRS Rule 280e is a new form of taxation without representation for cannabis businesses; a punitive tax liability that's encumbering every operator
— Javier Hasse (@JavierHasse) August 31, 2023
Anthony Coniglio of @NewLakeCapital & David Van Vlierbergen of Fernway cat at @Benzinga Conference
Join us in Chicago, Sept 27-28 -… pic.twitter.com/sxRJu7tLyX
Image by El Planteo
Posted In: NLCP
