Governor Kathy Hochul (D) signed a cannabis tax relief measure into law that will help New York City businesses that are not entitled to certain federal tax deductions under federal law. The bill, S7508, from Sen. Luis R. Sepúlveda (D) was approved by the State Senate in June and reached the governor's desk last week.

Prior to this law, cannabis companies were not only obliged to pay taxes but could not benefit from deductions under Internal Revenue Code 280E as they are viewed to be engaged in "trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act)." The signed bill was drafted to change this.

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This bill's summary notes that "deduction for business expenses, incurred by taxpayers authorized by the Cannabis Law to engage in the sale, distribution, or production of adult-use cannabis products or medical cannabis, for purposes of the unincorporated business tax (UBT), the general corporation tax (GCT), and the corporate tax of 2015, commonly referred to as the business corporation tax (BCT)."

New York City Mayor Eric Adams (D) also supports the law, noted Marijuana Moment.

After the numerous setbacks New York's cannabis industry has experienced including multiple lawsuits, delayed licenses and thousands of illicit operators, tax relief is more than welcome.

The marijuana operators in New York who could benefit from this change are public companies like Cannabist Company Holdings Inc (OTC:CCHWF) (previously Columbia Care), Curaleaf Holdings (OTCQX:CURLF), MedMen Enterprises (OTCQB:MMNFF), Acreage Holdings (OTCQX:ACRHF), Green Thumb Industries (OTCQX:GTBIF), RIV Capital (OTCPK: CNPOF) (which acquired Etain last December), iAnthus Capital Holdings (OTCPK: ITHUF), but also private ones like PharmaCann, Housing Works, Leaflink, etc.

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Photo: Benzinga edit with images by Gordon Johnson from Pixabay and Dennis Maliepaard via Unsplash