It looks like the U.S. Supreme Court is holding firm in its denial to overturn Section 280E, a cumbersome component of the federal tax code for those in cannabis. So firm, in fact, that they refused to even listen to the cannabis tax case of Eric Speidell et al. v. the U.S., who has been fighting back against the omnipotent power Section 280E gives the Internal Revenue Service (IRS) to audit cannabis businesses.
Speidell, who owns Colorado-based marijuana chain The Green Solution, has been pushing back against the invasive authority the IRS has to thoroughly audit cannabis businesses for nearly five years. After being audited in 2016 for information on his 2013 and 2014 tax returns, Speidell and several businesses launched into papa bear mode over their ability to claim federal business expense deductions.
In a petition, the businesses urged the court to interpret the Controlled Substances Act in a way that would allow state-legal marijuana companies to claim federal business expense deductions
While the Tenth Circuit claims they aren’t allowed to do so and/or may be doing so illegally, Spedeill, “asked the justices to find that the supremacy clause of the U.S. Constitution doesn’t prevent state-legal cannabis companies from claiming federal business expense tax deductions,” according to Law360.
The suit was filed by Spedeill and his cohorts back in March but only just came to fruition today when justices elected not to even hear the group’s case in court. Spedeill’s lawyer, James D. Thorburn of Thorburn Law Group LLC., told Law360 that the decision was “disappointing,” and even referenced some of the founding freedom principles our nation was built upon. “We just lost one of our most basic freedoms,” said Thornburn in reference to prohibiting revenue agents from entering our homes and searching our belongings. While it feels a bit hyperbolic, that’s genuinely how it feels for these cannabis business owners.
The cannabis industry isn’t exactly brand new, but it is still in its early developing stages, especially recreational marijuana. As cultivators, investors, business people, consumers, lawyers, medical patients, and a whole host of other groups work and fight together to establish a nation where cannabis is fully accepted and legally treated just as any other industry is, we must expect more disappointments such as the one handed down to Speidell et al. today. But we’ll get there – somehow, some way – and going through these legal channels is just one of the major hoops we’ll continue having to jump through alongside Speidell.