Connecticut And Illinois Governors Support Cannabis Industry With Tax Relief Measures, Here's How

Connecticut and Illinois recently made significant moves to show their support for marijuana industries by enacting tax relief via their budget legislation.

What's News?

Connecticut Gov. Ned Lamont (D) signed a bill to provide state-level tax relief for licensed marijuana businesses, as they are currently unable to make federal deductions under IRS Code 280E, reported Marijuana Moment.

Gov. Lamont highlighted the positive impact of this policy on the financial well-being of the cannabis industry. The newly approved package not only offers overall tax relief but specifically targets the financial burdens faced by marijuana companies. It is estimated that the state-level workaround for Code 280E will provide industry relief of $4.7 million in the 2024 fiscal year, increasing to $6.2 million in 2025, as projected by the governor's office.

In a parallel development, Illinois Gov. J.B. Pritzker (D) also signed a similar budget bill.  The legislation additionally directs funding to a cannabis development fund and extends the deadline for conditional licensees to secure storefronts, as reported by Marijuana Moment.

Similar Efforts Have Been Undertaken In Other States

In New Jersey, Gov. Phil Murphy signed a law decoupling marijuana businesses in the state from federal IRS Code Section 280E followed by the New York State Senates passage of a measure to provide tax relief to cannabis businesses in New York City, which are ineligible for certain federal tax deductions due to their involvement in controlled substance trafficking.

Oregon Congressman Earl Blumenauer reintroduced the Small Business Tax Equity Act, which seeks to amend the 280E IRS code and address tax-related challenges faced by cannabis companies.

While the process of de-scheduling cannabis remains complex and time-consuming, industry experts, such as Adam Goers, senior VP of corporate affairs at Columbia Care Inc. CCHWF expressed optimism at the recent Benzinga Cannabis Capital Conference for significant progress within the next year.

By providing tax relief and addressing the restrictions imposed by federal tax policies, these states are paving the way for a more favorable business environment for licensed marijuana businesses.

Photo: Courtesy Of Kelly Sikkema On Unsplash