How Pot Businesses Are Getting Smoked by High Taxes
What was the Tax Man smoking?
The legalized marijuana industry may generate better revenue per square foot than some traditional retailers. Profits, though, are another story.
Operators in the $7.1 billion dollar cannabis industry, such as Colorado-based LivWell Enlightened Health and California’s Harborside Health Center, are prohibited under the federal tax code from deducting expenses that other types of businesses can use, such as the cost of labor, marketing and advertising, office supplies and Internet service.
As a result, LivWell and Harborside, two of the largest operators in the industry, are stuck with high tax bills that cut into profits.