AndreTaxCo, PLLC

Wisconsin Cannabis & Hemp Industries 

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IRC § 280E Analysis / R&D Tax Credit Eligibility

• Does Section 280E Apply to state individual income tax?

  • N/A.

• Does Section 280E apply to state corporate income tax?

  • N/A.

• Are State R&D Tax Credits Potentially Eligible for "Plant Touching" (e.g. producers, cultivators, manufacturers, retailers) Cannabis Companies?

  • No​, subject to further 280E restrictions. 

• Are State R&D Tax Credits Potentially Eligible for Industrial Hemp Companies & "Non-Plant Touching" Separate Trade or Businesses (e.g. testing laboratories)?

  • Yes​, subject to further 280E analysis regarding company activities, structure, and applicable state laws.

• See Wisconsin R&D Credit Summary​

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State Law Background

(1) Hemp State Law Authority & Background​ ​

• Wis. Stat. §94.55; Wis. Stat. §94.67; Wis. Stat. §97.02; §348.27; Wis. Stat. §961.14; Wis. Stat. §961.32; Wis. Stat. §961.442; Wis. Stat. §961.55; Wis. Stat. §973.01 (effective Dec. 2, 2017)

•  (Also, see 2017 Act 100 or S.B. 119.)

  • Directs the state Department of Agriculture, Trade and Consumer Protection (DATCP) to establish a state industrial hemp program.

  • Includes GPS coordinates, fee payment and a criminal history search as requirements for licenses.

  • Directs the DATCP to establish and administer a seed certification program or designate another agency or organization to administer the program.

  • Requires the DATCP to create a pilot program to study the growth, cultivation and marketing of industrial hemp.

  • Specifies exemptions from prosecution under the state Uniform Controlled Substances Act.

  • Amends the definition of agricultural commodity to include industrial hemp. 

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(2) Medical Marijuana State Law Authority & Background  - Limited Access Marijuana Product Laws (low THC/high CBD- cannabidiol)

• Statutory Language (year) - AB 726 (2013 Act 267)

  • Patient Registry or ID cards - No

  • Allows Dispensaries - Physicians and pharmacies with an investigational drug permit by the FDA could dispense cannabidiol. Qualified patients would also be allowed to access CBD from an out-of-state medical marijuana dispensary that allows for out-of-state patients to use their dispensaries as well as remove the products from the state. No in-state production/manufacturing mechanism provided.

  • Specifies Conditions - Seizure disorders

  • Recognizes Patients from other states - N/A

  • State Allows for Retail Sales/Adult Use - Exception to the definition of prohibited THC by state law, allows for possession of "cannabidiol in a form without a psychoactive effect."  THC or CBD levels are not defined.

• Are sales of medical marijuana subject to sales tax?

  • N/A

• Is medical marijuana subject to an excise tax?

  • N/A

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(3) Recreational Marijuana State Law Authority & Background​​​ - N/A

• Are sales of recreational marijuana subject to sales tax?

• • N/A.

• Is recreational marijuana subject to an excise tax?

  • N/A.

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(4) Does the State impose a Stamp Tax or Controlled Substances Tax?

• No.