Channeling the Boston Tea Party’s rebellious spirit while dressed in traditional colonial garb, MariMed executives and team members staged the ‘Boston 280E THC Party’ from a boat in Boston Harbor on July 12. In reenacting 1773’s “No taxation without representation” revolt, yesterday’s event protested Section 280E of the Internal Revenue Service Code. Section 280E burdens cannabis companies with paying significantly higher taxes than most U.S. businesses, often resulting in higher product prices for consumers. MariMed Inc. (“MariMed” or the “Company”) (CSE: MRMD) (OTCQX: MRMD), a leading Massachusetts-based cannabis company, surprised the crowds at Boston Harbor when they boarded the Liberty Star schooner, heaved cargo chests emblazoned with “WEED” overboard1 and chanted anti-280E slogans.
Section 280E is a prime example of the unique obstacles that legal cannabis businesses must navigate that significantly increase the cost of conducting business. When calculating their taxes, Section 280E prevents the deduction of ordinary business expenses associated with “trafficking” a Schedule 1 or 2 controlled substance. Approximately 90% of U.S. adults support its legalization, yet cannabis remains classified as a federally illegal Schedule 1 controlled substance by the U.S. federal government, on par with heroin. Due to Section 280E, cannabis businesses pay much more in taxes than they would if it were repealed, according to Wolf & Company.
As a Boston-based multi-state cannabis operator, MariMed protested in a way that would make the Company’s Patriot ancestors proud – by paying homage to the most famous tax protest in history during the year of the Boston Tea Party’s 250th anniversary. By shining a light on Section 280E’s negative financial impact on legal cannabis operators, MariMed hopes to effectuate policy change geared towards industry growth and advancement.
MariMed CEO and President Jon Levine said, “MariMed is among the most-sound financial companies in cannabis, with top-selling brands in the markets we serve. Our protest was less about us and more to provide a voice for the entire industry. 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 It should be repealed.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.”
Mr. Levine continued, “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.”
A growing number of U.S. Congressmen and women are aligned with MariMed’s take on 280E: “State-legal cannabis businesses are denied equal treatment under 280E,” Congressman Earl Blumenauer (D-OR) said earlier this year, referencing it as “grotesquely unfair treatment” and urging his colleagues to “allow legal cannabis operations to deduct business expenses, just like any other industry.”
