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Get involved!
Please visit the [Cannabis Business Association of Illinois].

Tell Illinois Lawmakers:
Preserve 280E Tax Relief!

In 2023, the Illinois General Assembly passed legislation to provide cannabis businesses relief from Section 280E of federal tax code, which has long been a burden on cannabis operators by preventing them from deducting ordinary business expenses.

Under Illinois’ relief program, cannabis businesses can deduct business expenses on their state tax returns, providing a crucial support mechanism for the industry as it continues to grow. Eliminating this relief would have numerous effects on our state’s burgeoning cannabis industry:

Increased Financial Strain
Cannabis businesses will face higher tax liabilities, leading to reduced profitability and financial instability. This added strain comes amid pressure from the illicit and unregulated synthetic hemp-derived market and newer cannabis markets in Michigan and Missouri, which have significantly lower tax rates.

Reduced Reinvestment & Growth
Higher tax burdens limit the ability of cannabis businesses to reinvest in their operations, hire new employees, and expand their businesses. This stifles innovation and growth, negatively impacting the state’s economy.

Impact on Social Equity
Illinois’ cannabis program has made significant strides in promoting social equity and supporting communities disproportionately impacted by the War on Drugs. Increased financial strain on businesses could hinder these efforts, reducing resources available for programs that cannabis revenue funds.

Competitive Disadvantage
Cannabis businesses in Illinois will be at a competitive disadvantage compared to those in states that continue to provide relief from Section 280E, including California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington, D.C.

Drives Consumers to Alternative Markets
Studies show consumers are willing to pay a premium above illicit market pricing to participate in the legal adult- use and medical cannabis industry. That premium is statistically between 10% and 15%. Once that differential exceeds 15%, as it does in Illinois, the pace of consumer conversions into the legal market slows. Illinois’ tax policy is already sending consumers to seek cannabis products from lower tax neighboring states or illicit markets, eliminating 280E relief will only cement this diversion.

Take Action Now!