AndreTaxCo, PLLC

Virginia 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 Virginia R&D Credit Summary​

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State Law Background

(1) Hemp State Law Authority & Background​ ​

• Va. Code § 3.2-4112 to 3.2-4120 (2016)

  • Authorizes research and commercial hemp programs overseen by the Virginia Board of Agriculture and Consumer Services and the Virginia commissioner of agriculture and human services.

  • The commissioner must establish separate licenses for the research program and for commercial growers.

  • Nothing in this chapter allows individuals to violate federal laws

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

• Statutory Language (year) - HB 1445

• ​During the 2018 session, Virginia lawmakers greatly expanded upon a 2017 law that permitted patients suffering from intractable epilepsy to use some types of cannabis oil with a doctor’s certification. On March 9, 2018, Gov. Ralph Northam signed HB 1251, which provides that doctors can recommend CBD or THC-A cannabis oil for any condition. Patients can possess the oil if it meets the state's requirement of at least 15% CBD or THC-A and no more than 5% THC, and they have in their possession their doctor’s recommendation form (called a “written certification”).

  • Patient Registry or ID cards - No

  • Allows Dispensaries - No in-state means of acquiring cannabis products.

  • Specifies Conditions - Intractable epilepsy

  • Recognizes Patients from other states - No

  • State Allows for Retail Sales/Adult Use - Cannabis oils with at least 15% CBD or THC-A and no more than 5% THC.

• 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.