AndreTaxCo, PLLC

Georgia 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 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 Georgia R&D Credit Summary​

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State Law Background

(1) Hemp State Law Authority & Background​

• Georgia HB 213 / Ga. Code §§ 2-23-1 to 2-23-12 and § 16-13-25 

  • Provides for licensing requirements for growers and processors as part of a state hemp plan. 

  • Authorizes certain colleges and universities to conduct research on the cultivation, breeding and development of hemp.

  • Excludes regulated hemp and hemp products from the definition of marijuana as a controlled substance.

 

(2) Medical Marijuana State Law Authority & Background 

• Statutory Language (year) - HB 1 (2015) (signed by governor 4/16/15) (highly restrictive medical marijuana)​

  • Allows Dispensaries - Law allows University System of Georgia to develop a lot THC oil clinical research program that meets FDA trial compliance.

  • Specifies Conditions - Yes, end stage cancer, ALS, MS, seizure disorders, Crohn's, mitochondrial disease, Parkinson's, Sickle Cell disease

  • Recognizes Patients from other states - No

  • State Allows for Retail Sales/Adult Use - Cannabis oils with low THC= below 5% THC and at least an equal amount of CDB.

  • Patient Registry or ID cards - Yes

• Are sales of medical marijuana subject to sales tax?

  • N/A. 

• Is medical marijuana subject to an excise tax?

  • No.

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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?

• Yes. A Controlled Substances Tax is imposed on the use, possession, consumption, storage or transfer of marijuana. The tax rate for marijuana is $3.50 per gram. The tax is not applicable to persons who lawfully possess marijuana under a medical prescription. See Ga. Code. Ann. Sec. 48-15-4.