Connecticut Lawmakers Pass Marijuana Tax Relief And Regulation Bills, Gov Lamont's Approval Expected

Connecticut lawmakers took a major step toward bolstering the state's marijuana industry by advancing two bills to Gov. Ned Lamont (D) for final approval.

The first, a budgetary measure that seeks to provide tax relief to licensed cannabis businesses, which are currently barred from claiming federal deductions under IRS Code 280E, reported Marijuana Moment.

The second is a comprehensive cannabis omnibus that encompasses a range of reforms including the introduction of off-site event permits for marijuana retailers, regulations on intoxicating hemp-derived products, and the establishment of the Office of the Cannabis Ombudsman.

Tax Relief for Licensed Cannabis Businesses

The budget legislation enables licensed cannabis companies in Connecticut to deduct ordinary and necessary expenses that would otherwise be eligible for federal income tax deductions.

The bill, H.B. No. 6941, from Rep. Matthew Ritter (D) also covers appropriations for cannabis social equity, substance misuse prevention and regulation funds. Notably, it includes the repeal of a tax credit for "angel investors" supporting new cannabis ventures, a policy change previously proposed by Gov. Lamont, who expressed support for the bill and is expected to sign it into law in the coming days.

Creating A More Equitable & Sustainable Market For Licensed Marijuana Businesses

The inclusion of the 280E fix aligns with efforts undertaken in various states to alleviate the burden of higher tax rates faced by state marijuana markets due to federal prohibition.

  • In New Jersey, Gov. Phil Murphy signed a law that decouples marijuana businesses in the state from federal IRS Code Section 280E.
  • New York's state Senate recently passed a measure that would provide tax relief to cannabis businesses in New York City, which are currently ineligible for certain federal tax deductions due to their involvement in "trafficking in controlled substances ( within the meaning of Schedule I and II of the Controlled Substances Act)."
  • Oregon, Congressman Earl Blumenauer, a House member who founded the Congressional Cannabis Caucus reintroduced the Small Business Tax Equity Act, a bill that seeks to amend an IRS code​​​.

Although descheduling has proven to be a complex process and may take several years to complete, Adam Goers, senior VP of corporate affairs at Columbia Care Inc. CCHWF said at the recent Benzinga Cannabis Capital Conference that he expects a decision to be made in less than a year.

Related News

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Photo: Courtesy Of Markus Winkler On Unsplash

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Posted In: CannabisGovernmentNewsPenny StocksRegulationsPoliticsMarketsGeneralAdam GoersCannabis in ConnecticutColumbia Care Inc.Congressman Earl BlumenauerConnecticut Cannabis Omnibus BillGov. Ned LamontGov. Phil MurphyIRS Code 280E
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