Late Wednesday evening, the Appropriations and Financial Affairs Committee voted unanimously to move LD 1063 off of the appropriations table to be enacted into law. With an effective date of January 1, 2023, the bill allows for adult use cannabis businesses in Maine to begin deducting ordinary business expenses on their tax returns. Prior to the passing of LD 1063, Maine law was in conformity with federal law, which precludes cannabis companies from deducting their expenses when determining taxable income. The federal tax law (Code Section 280E), has been an enormous financial burden on state-legal cannabis businesses and as a result these businesses are taxed on gross profits, rather than net income like everyone else.
Given our years of experience and dedication to learning about the tax code surrounding this industry, One River was asked to testify on behalf of the bill. We presented our expertise on the case earlier in the year, and are excited to have contributed to this milestone. With the passing of LD 1063, we will see some of our clients and others in the industry save over six figures in state income taxes. Congratulations to all of Maine’s adult-use cannabis operators. This is a monumental moment for the industry in Maine, which set a new record in June, topping $18.4 million in sales.