Executives Re-Enact Boston Tea Party To Protest Cannabis Tax Rule

Executives Re-Enact Boston Tea Party To Protest Cannabis Tax Rule
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Executives from a Massachusetts-based cannabis company dressed in colonial garb aboard a ship in Boston Harbor on Wednesday to protest an IRS rule that requires regulated marijuana companies to pay taxes that are significantly higher than businesses in other industries. The demonstration, which evoked the legendary Boston Tea Party at the same site 250 years ago, was orchestrated by licensed cannabis company MariMed to protest 280E, an IRS tax rule that is the bane of state-legal cannabis companies from coast to coast.

Lucas McCann, the chief science officer and a co-founder of cannabis compliance consulting firm CannDelta, explained how the IRS rule that prohibits most standard business tax deductions affects companies in the regulated cannabis industry.

“Section 280E of the Internal Revenue Code is a daunting hurdle for cannabis businesses, including retail dispensaries. In short, 280E is a code used to make cannabis businesses less profitable by making them pay more of their overall profits in taxes,” McCann, who was not involved in Wednesday’s protest, writes in an email. “Rooted in the 1980s, this outdated tax legislation was crafted to prevent drug dealers from claiming any business expenses on their taxes. In a modern twist of coincidence, today’s cannabis businesses operate legally under state law but are still treated as illicit businesses, federally speaking, because cannabis is still listed as a Schedule I substance.”

Protest Evokes The Boston Tea Party

Wednesday’s protest re-enacted the famed Boston Tea Party of 1773, when colonists protested high taxes levied by the British Crown on tea shipped to the New England colonies. In an act of independence-minded defiance, members of the group the Sons of Liberty, some disguised as Native Americans, boarded ships moored in Boston Harbor and dumped chests of tea into the water to protest the high taxes.

MariMed’s demonstration resurrected themes from the protest 250 years ago, this time featuring executives from the company dressed in period clothing aboard the Liberty Star, a schooner adorned with banners protesting 280E. Brandishing boxes emblazoned with the word “weed,” the costumed protesters shouted slogans as they boarded the ship and heaved the chests into Boston Harbor. In a statement, the company noted that the boxes were empty, made of natural wood and promptly retrieved from the water. 

“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,” the company wrote. “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.”

Jon Levine, the CEO of MariMed, said that the demonstration was a way to draw attention to the tax rules, which negatively impact patients and consumers and threaten to cripple businesses in the regulated cannabis industry. He also called for an end to 280E for businesses operating in compliance with state law.

“Section 280E is unfair and hampers companies striving to make cannabis accessible for consumers and medical cannabis patients in all legal states,” Levine said in a statement from MariMed. “It should be repealed. Doing so would remove an obstacle to our mission to improve people’s lives every day through cannabis.” 

But eliminating the tax rule is easier said than done. A legislative repeal of the rule is required, but so far, bills to reform the federal government’s policy on cannabis have not specifically addressed 280E. The comprehensive legalization of cannabis would make the rule a moot point, but that solution is unlikely to come anytime soon.

“There are several bills that have been floated in D.C., but none to our knowledge that includes language about eliminating 280E,” Levine said in a statement to High Times. “The most likely path to the elimination of 280E is for cannabis to be rescheduled or de-scheduled altogether. President Biden has asked the Department of Health & Human Services for an opinion about that, but nothing’s happened yet. Just another example of the slog in D.C. as it pertains to federal cannabis reform.” 



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