Cannabis
Tax advisory for cannabis cultivators, manufacturers, dispensaries, and MSOs. Section 280E planning, COGS optimization, and multi-state compliance — handled by specialists who understand the unique challenges of this industry.
Tax strategy that works within the industry's unique constraints.
Cannabis businesses operate under the most restrictive tax environment in US industry. Section 280E effectively eliminates most deductions, creating effective tax rates that can destroy profitability. Expert planning is not optional — it's existential.
We work with the full cannabis supply chain — cultivators, manufacturers, dispensaries, and MSOs — implementing the legal strategies that minimize 280E impact and preserve the viability of your operation.
How we serve cannabis businesses
Specialized tax services for the full cannabis supply chain.
Section 280E Planning
Navigate the most significant tax challenge in cannabis — Section 280E, which disallows deductions for businesses trafficking in Schedule I substances. We implement legal strategies to maximize allowable COGS deductions and minimize the 280E impact.
COGS Optimization
The only deductions available under 280E are cost of goods sold. We implement inventory accounting methods and COGS allocations that legally maximize deductible amounts, dramatically reducing your effective tax rate.
Multi-State Cannabis Compliance
Navigate state-specific cannabis tax regulations, excise taxes, cultivation taxes, and retail taxes across all legal states. We manage the full state tax compliance burden for multi-state operators.
Cannabis Business Structuring
Structure cannabis businesses to separate 280E-affected operations from ancillary activities. Properly structured holding companies, management entities, and real estate can preserve deductions lost at the operating level.
Cash Business Tax Management
Most cannabis businesses operate primarily in cash due to banking limitations. We implement accounting systems and tax strategies that manage the unique challenges of cash-intensive businesses.
MSO Tax Strategy
Tax advisory for multi-state operators (MSOs) managing licenses across multiple states. Advise on centralized management structures, IP arrangements, and capital deployment across state lines.
Get expert cannabis tax advisory — from single dispensary to multi-state operator.
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Built for operators who build businesses against the odds.
Cannabis entrepreneurs face challenges no other industry confronts. Section 280E, banking restrictions, regulatory complexity — we help you navigate all of it with a tax strategy that maximizes viability and positions your business for long-term success.
Maximize your only available deduction under 280E.
When most deductions are eliminated, maximizing cost of goods sold becomes the most important tax activity in your business. We implement systematic COGS tracking, allocation, and documentation that legally maximizes your deductions within the constraints of 280E.
Direct Cost Identification
Systematically identify all direct material, labor, and overhead costs that qualify as COGS for cultivators, manufacturers, and dispensaries.
Inventory Method Selection
Choose and implement the optimal inventory accounting method (FIFO, LIFO, average cost) to maximize COGS deductions in your specific business model.
Ancillary Service Separation
Document and maintain the separation of non-cannabis activities to preserve ordinary deductions outside the 280E disallowance.
Year-End Inventory Optimization
Conduct year-end inventory analysis and adjustments to ensure COGS is maximized within applicable accounting rules and tax law.
Why cannabis businesses choose Jaguar Tax
280E Specialist Expertise
Section 280E is the single most impactful tax issue in cannabis. Our team has deep expertise in 280E case law, IRS guidance, and legal planning strategies to minimize its impact.
State License Complexity
Cannabis tax law varies dramatically by state. We stay current with the rapidly evolving state regulatory landscape and ensure full compliance across all your operating jurisdictions.
Cash Accounting Systems
We help cannabis businesses implement proper cash accounting systems, internal controls, and documentation practices that protect against IRS scrutiny.
Industry Regulatory Navigation
Cannabis tax strategy must account for state licensing requirements, track-and-trace systems, and banking limitations. We advise in context of the full regulatory environment.
"Before Jaguar Tax, we were paying taxes on almost our entire gross revenue. Their 280E planning and COGS restructuring reduced our effective tax rate from 68% to 39%. They saved our business."
Cannabis Tax Questions
Common questions from cannabis business owners and operators.
Section 280E of the Internal Revenue Code prohibits businesses trafficking in Schedule I or II controlled substances (including cannabis under federal law) from deducting ordinary business expenses — payroll, rent, marketing, etc. This means cannabis businesses pay income tax on gross profit rather than net profit. For a business with 40% gross margins, 280E can result in effective tax rates of 60-80%. COGS deductions are still allowed.