MASSACHUSETTS – Canna Provisions, a leading cannabis company in Massachusetts, is spearheading a legal battle against U.S. Attorney General Merrick Garland, contending that the Controlled Substances Act is unconstitutional for licensed cannabis businesses.
According to Spectrum News, the lawsuit, filed on Oct. 26, 2023, in the U.S. District Court for Western Massachusetts, seeks a ruling asserting the act’s unconstitutionality concerning intrastate marijuana cultivation, manufacture, possession, and distribution as per state law.
The plaintiffs, including Wiseacre Farm and Treevit CEO Gyasi Sellers, argue that IRS Tax Code 280E, which denies tax deductions to cannabis businesses, unfairly burdens them with an effective tax rate of 74%, significantly higher than the federal corporate tax rate of 21%.
With marijuana legalized in 38 states, the industry is pushing for equitable taxation, anticipating positive impacts on job growth and revenue. The government’s response to the lawsuit is awaited.
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