A new U.S. Tax Court case, New Mexico Top Organics, Inc. d/b/a Ultra Health v. Commissioner, could reshape how Section 280E of the U.S. tax code applies to state-legal medical cannabis businesses.
Ultra Health argues that Section 280E turns on the Controlled Substances Act’s scheduling criteria — not its listed schedules — and that marijuana no longer meets the criteria for a Schedule I or II controlled substance.
If successful, the case could materially reduce the effective federal tax burden for compliant medical providers.
Read more about the case here.