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New Senate Bill Could Solve Medical Marijuana’s Tax Problems


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The bill aimed at healing the sick could save dispensary owners lots of money

When Bryan and Lanette Davies got an $875,000 bill from the Internal Revenue Service, they didn’t pay it. Instead, they took the IRS to court, arguing that a 1982 law meant to prevent drug traffickers from deducting business expenses should not apply to Canna Care, their small “Christian-based” medical marijuana dispensary in Sacramento–or any other medical marijuana dispensary legal under state law.

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The couple is in the midst of a years-long legal battle over these expenses, arguing that marijuana dispensaries should be treated like most other small businesses and be allowed to deduct payroll, rent and health benefits from their taxable income.

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But a new bill introduced in the Senate could help bring their trial to a conclusion.

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