Boston … ‘280E THC’ Party? MariMed Takes it Back to 1773

Courtesy of MariMed

“No taxation without representation! Down with 280E!”

Taking a page out of the Sons of Liberty playbook from colonial times, Massachusetts-based cannabis multistate operator MariMed’s executives and team members staged a revolt July 12 to protest unfair taxes in the industry.

Channeling the Boston Tea Party’s rebellious spirit while dressed in period-appropriate garb, the company’s management and employees took to the Boston Harbor for a “Boston 280E THC Party” and reenacted the infamous scene from 250 years ago—one that represents a fight against Britain’s tyrannical rule.

In this new edition, the MariMed team members boarded the Liberty Star schooner, heaved cargo chests emblazoned with “WEED” overboard and chanted anti-280E slogans.

Under current law, Section 280E of the federal tax code bars state-legal cannabis operators from deducting everyday expenses related to running their businesses, including rent, utilities and payroll—deductions afforded to other American businesses. Since cannabis remains scheduled as a Schedule I drug on the Controlled Substances list, these ordinary business expenses are associated with “trafficking.”

In other words, while the U.S. federal government does not recognize cannabis operators as legal businesses, it still forces them to pay taxes and singles them out under Section 280E.

But cannabis businesses represent real opportunities for real Americans, including more than 428,000 full-time workers in the U.S. in 2022, many of whom have been impacted by the unique regulatory burdens the industry continues to face. Many of these regulations simply don’t exist in other industries that provide goods and services also in demand by American consumers.

By shining a light on Section 280E’s negative financial impact on legal cannabis operators, MariMed hopes to effectuate policy reforms that would provide a pathway to industry growth and advancement, according to a press release by the company.

MariMed CEO and President Jon Levine said the July 12 staging wasn’t self-serving, as his company is among “the most sound” financial companies in cannabis.

“Our protest was less about us and more to provide a voice for the entire industry,” he said. “Section 280E is unfair and hampers companies striving to make cannabis accessible for consumers and medical cannabis patients in all legal states. It should be repealed. Doing so would remove an obstacle to our mission to improve people’s lives every day through cannabis.”

When Section 280E burdens cannabis companies with paying significantly higher taxes than most U.S. businesses, MariMed executives argued, it often results in higher product prices for consumers, making it more difficult for licensed businesses to compete with the illicit market.

Eradicating the illicit market and replacing it with products that are tested for consumer safety remains a key goal for lawmakers who support and write legislation for legalization.

Despite the federal stand on 280E, many states have taken action to remove this tax burden at the state level for their licensed cannabis operators.

“We applaud some of the states where we operate, including Massachusetts, Illinois and Maryland, plus the 17 others that have approved laws providing cannabis businesses relief from 280E,” Levine said.