Yup. Not until it’s legalized.
So you hire a creative accountant 
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Like me I am a construction company
When asked what the f&$! All the solvents are needed for. My reply
Is I desolve i don t demolish 
ANd the powders make the finest concrete you have ever put your eyes on 
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Again, I was referring to hemp. While we can all sit and agree it’s the same damn thing, the passing of the farm bill reclassified hemp as a non-controlled substance, opening up the industry to numerous tax breaks, specifically removing it from compliance with tax code 208e. Here’s a couple of links for reference.
https://www.cannalawblog.com/cannabis-taxation-does-irc-section-280e-apply-to-industrial-hemp/
Citing the last link attached:
”280E No Longer Applies
Previously, hemp related businesses were often subject to section 280E, and therefore could not take any business deductions or credits, and the only cost recovery is via cost of goods sold. This is no longer the case, now hemp producers can tap into the favorable farm tax rules, which we’ll dive into.
No Need to Track Inventory
For farms with less than $25 million in gross receipts over the past three years, there’s no need to track inventory. What does that mean? It means there’s no add-back to taxable income for ending inventory. If a farm has not sold off all of its year’s harvest prior to year end, it still can deduct all of the costs into it took to produce it. Previously, when hemp was a controlled substance, the act of growing hemp (and still for cannabis) was deemed manufacturing, not farming, which requires an add-back of ending inventory at year end.
Expanded Use of Cash Method of Accounting
Again, farms with less than $25 million in gross receipts over the past three years can use the cash method of accounting. What does this mean? With the cash method available, and no requirement to track inventory, It means that a farms will have a great ability to manage their taxable income by purchasing supplies, fertilizers, equipment, ect. in preparation for the next year’s harvest and take those deductions in the current year.
Bonus Depreciation and Sec. 179 Expending
Until January 1, 2024 eligible equipment is available for immediate 100% bonus depreciation. This now applies to certain used property too, previously, property needed to be brand new for use to be eligible.
Sec. 179 provides for the full immediate deduction similar to 100% bonus depreciation, and has generous dollar limits up to $1 million can be immediately deducted in 2018 (with several limitations and thresholds). Sec. 179 is available for single-purpose horticultural structures.”
Also, a majority of my clients have applied for tax exemption status when purchasing our extractors meeting wholesaler, reseller, manufacturer, or agricultural exemptions.
The really smart ones (again on the equipment purchasing end) are creating their own leasing companies. They purchase their equipment under a separate LLC, and finance/lease it back to their processing company, managing depreciation of value over 5-10 years.
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Yeah but the problem is you can’t right off the actually oil yet.
No but they can write off the costs of production for unsold biomass it oil, which brings me back to my original comment; if they make a massive facility they can write off the losses (cost of production/ operations/ infrastructure) until the economy catches up to their scale.
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I hope they have Monies to last five years.
That’s way too idealistic and not grounded. My team does 100 million liters a month through various oil and gas industries.
You get more written off on what you do with oil than production itself.
@BrotanicalMatt thats why I registered as a non-chrmical food grade essential oil manufacturer back in 2016!
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@usernamesarehard there’s even more loopholes…start a cannabis or hemp company in segments. Don’t start from the gate saying it’s a cannabis manufacturing facility…approach each step from a different “Traditional” angle. Need funds for buildout? Apply for traditional construction loans…Need funding for equipment? Apply with a traditional equipment finance company. Then funnel everything non “plant-touching” through a management company to avoid 280e
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They either up the customer demand, or start getting the dose closer to 5mg per kg of body weight and create demand for a higher dose of cbd. Mmmmm yum efficacy.