Assembly Passes NJCPA-Drafted Bill to End Unfair Taxation of Cannabis Companies

by Jeff Kaszerman, NJCPA Government Relations Vice President – October 28, 2022
Assembly Passes NJCPA-Drafted Bill to End Unfair Taxation of Cannabis Companies

Legislation written by the NJCPA Cannabis Interest Group (A3946) that would end New Jersey's unfair tax treatment of cannabis businesses was passed by the Assembly on Oct. 27, 2022.

Internal Revenue Code (IRC) Section 280E forbids companies engaged in illegal drug activities from deducting business expenses. New Jersey piggybacks on this provision, in effect treating cannabis companies as if they are engaged in illegal drug trafficking. A3946, as amended in committee, will decouple cannabis businesses from 280E. In addition to the NJCPA, the bill was supported by all the other major business groups.

The bill must still pass the Senate and be signed by the Governor. The NJCPA will continue urging lawmakers to support the bill.

View the NJCPA's letter to members of the Assembly