Weedweek reports
Catalyst Cannabis, one of California’s largest retail chains, sued Florida-based Trulieve, alleging the leading MSO “stole” a $305,000 federal tax refund to which Catalyst was entitled. The suit revolves around Trulieve’s undisclosed interpretation of industry-hated tax rule 280E, which it…
full story (paywall)
https://www.weedweek.com/stories/breaking-catalyst-sues-trulieve-over-280e-dispute/
Green Market report also have the story
Florida-based Trulieve Cannabis Corp. (OTC: TCNNF) (CSE: TRUL) was slapped with a new lawsuit by California-based retail chain Catalyst Cannabis Co., which claims the southeastern multistate operator first sold it a coastal dispensary in 2023 and then secretly amended the shop’s federal tax returns for an extra refund of nearly $305,000.
The scheme was allegedly carried out by Trulieve following the sale of 805 Beach Break in Grover Beach during its exit from the California cannabis market. Catalyst said in the lawsuit that it paid “fire sale” prices for both the dispensary and the real estate the shop sits upon, because the dispensary was underwater financially and in danger of shuttering. The lawsuit was filed Monday in California Superior Court in Los Angeles County.
The dispensary itself was sold for just $37,500, but Catalyst asserted in its lawsuit that the sale agreement specifically required Trulieve to disclose all tax documents and that all of those documents be up to date and compliant with state and federal law. That, according to the lawsuit, didn’t happen.
After the original deal was struck in June 2023, Trulieve provided Catalyst with the original tax returns filed for 805 Beach Break, but in October it filed an amended return for 2021 with the Internal Revenue Service, before the sale of 805 Beach Break to Catalyst closed in December 2023.
In that amended return, Trulieve used the same tax strategy it used for itself last year to claim a $113 million tax refund from the IRS: It asserted that 805 Beach Break wasn’t subject to 280E, the federal tax code provision which bars marijuana businesses from claiming standard business deductions.
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