The cannabis industry has been attracting greater acceptance across the country as more states have legalized medical and recreational marijuana, as well as related products such as CBD and hemp, while accountants have been helping their clients deal with the tax and financial implications.
However, marijuana has still not been legalized by the federal government, although there have been attempts to change that in Congress in recent years. Last month, a group of Senate Democrats introduced the Cannabis Administration and Opportunity Act, which would end the federal prohibition on cannabis by removing it from the federal list of controlled substances and empowering states to implement their own cannabis laws (see story). On the tax side, the bill would eliminate the Tax Code’s restriction on cannabis businesses claiming deductions for business expenses and implement an excise tax on cannabis products.
However, the prospects for passing the bill are dim right now. Lawmakers are getting set to focus on the upcoming midterm elections in November after the Senate Democrats’ Inflation Reduction Act moves to the House and is expected to pass Friday on a party line vote.