Client advisory / October 9, 2026
Cannabis Taxation
and Section 280E
Section 280E of the Internal Revenue Code generally limits deductions and credits for businesses trafficking in prohibited Schedule I or II controlled substances. The April 2026 order moved covered medical marijuana to Schedule III; it did not reschedule all cannabis. Treasury states that rescheduling generally removes the Section 280E bar for qualifying activity. Eligibility depends on the business, its activities, and the tax year. The firm's recommendation below is a filing recommendation, not a statement that relief is legally unavailable. Review any proposed deduction or refund claim with counsel and a CPA.
Source: Treasury and IRS statement on medical marijuana rescheduling.
Jarvis Law currently advises against claiming cannabis-related operating expense deductions based on relief from Section 280E or seeking related refunds for prior tax years.
This filing recommendation is distinct from eligibility for relief under applicable law. The full advisory explains the scope and financial consequences.
Read the full advisory
Three pages, including filing considerations and linked authorities.
This advisory provides general information as of October 9, 2026. It does not constitute individualized legal or tax advice or establish an attorney-client relationship. Applicable law, agency guidance, and pending proceedings may change. Consult counsel and a tax adviser regarding the circumstances of a particular business.