Section 280E of the tax code states that selling cannabis violates federal law since the drug is classified as Schedule 1. In a Nov. 30 ruling, Judge Mark V. Holms called the dispensary's income tax operating structure "inefficient." Harborside could be hit with a total of taxes and penalties totaling $20 million.
With the tax law a byproduct of the nation's patchwork of drug laws laws, the is regarded as an industry-wide loss. The standard tax rate for American business is 35% while marijuana businesses will continue to pay as much as 70%.
"We are prepared to pursue this case, legally and politically, for as many more years as it takes to achieve the justice that cannabis patients and practitioners deserve," said Harborside CEO Steve D'Angelo. According to D'Angelo, the IRS audited Harborside for six years prior to the trial's opening in June of 2016. (Cannabis Business Times)