Florida Residents Convicted in $4.8 Million CARES Act Fraud Scheme

The cannabis industry continues to grapple with significant financial challenges primarily due to Section 280E of the Internal Revenue Code, which forces businesses to pay taxes on gross income rather than net profit. Growise CPAs has introduced a new tax strategy that reportedly reduces tax burdens for dispensaries by up to 57% and for cultivators by up to 25%, offering a potential lifeline to operators struggling under high effective tax rates. Traditionally, many businesses have relied on the 471A strategy to mitigate these burdens, but Growise claims its method substantially outperforms it. The ongoing effects of 280E are seen as creating an uneven playing field, penalizing state-legal cannabis operators while failing to address the original intent of the law, which was to target illicit drug activities. As the cannabis market matures, evolving tax strategies will be critical for operators aiming to thrive in a heavily regulated environment. The situation underscores the need for reform in federal tax policy regarding cannabis businesses.