On June 7, the Illinois Governor signed a new budget bill which includes a range of provisions for cannabis businesses for the first time.
The state budget bill for the upcoming fiscal year includes a ‘Cannabis Regulation and Tax Act’.
This would enable any licensed cannabis business to take tax deductions on their business which have been denied to cannabis operators under Section 280E of the Internal Revenue Code.
According to High Times, this can be backdated ‘for the taxable year’ from January 1 2023 onward.
Section 280E was originally created in the 1980s to prevent anyone from making tax deductions if their business involved controlled substances.
Alongside these changes, the budget also lays out the establishment of a Cannabis Business Development Fund aiming to provide low-interest rate loans to qualified social equity applications, helping pay for things like starting and operating expenses.
It is understood that the fund will also be used to pay for research involving ‘minorities, women and veterans’ in the cannabis industry.
By July 1, 2023, $40m from the Compassionate Use of Medical Cannabis Fund will be transferred to the Cannabis Business Development Fund.