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280E

Definition: Internal Revenue Code §280E, a US federal tax provision that prohibits businesses "trafficking" in Schedule I or II controlled substances from deducting ordinary business expenses. Because cannabis remains federally Schedule I, state-legal dispensaries, cultivators, and manufacturers pay an effective tax rate of 60–85% on profits. Rescheduling cannabis to Schedule III would end 280E exposure.

Related Terms

Schedule I — The US federal Controlled Substances Act category for drugs considered to have "no accepted medical use" and high abuse potential.
Rescheduling — The DEA's proposed move of cannabis from Schedule I to Schedule III of the Controlled Substances Act.

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