Cannabis Companies Generously Support Their Communities But Don't Get to Deduct It From Their Taxes
The same federal rules that make it hard to use a bank like every other legitimate business also forbid taking any of the normal tax deductions.
As we come into the home stretch of 2018, the cannabis industry is thinking about big important things. You know… MJBizCon in Las Vegas, the upcoming holidays, end-of-year tax planning. Rest assured, the last group is smallest by far. But not for the reason you’d think.
Non-cannabi will make end-of-year charitable contributions to reduce 2018 federal taxes. Cannabis companies cannot capture that deduction, says Jeff Garrison, CPA. “The same federal laws that prohibit interstate banking and commerce prohibit federal charitable tax deductions by cannabis businesses.”
“At the same time,” says Garrison: “Many applications for state or city cannabis operating licenses include a whole section on social benefit programs.”
No deductions? Enforced giving? It seems the industry is getting a whole lot of stick and not much carrot. So what do cannabis people do when faced with adversity?
They create a better world. See if you measure up to some of these heroic industry efforts:
The Veterans Cannabis Ball: Multiple Sponsors
On Friday November 9th, the second annual Veterans Cannabis Ball was held to benefit The Veterans Cannabis Coalition. This critical advocacy and educational organization observes that “Through cannabis, veterans of all generations and states of health have experienced improvements in their quality of life -- whether it is a World War II veteran with cancer or an Iraq veteran with a traumatic brain injury.” That’s why it is “dedicated to ensuring that veterans have access to the medicine they need without fear or stigmatization, and “focused on engaging stakeholders, educating policymakers and the public, and advocating for fair and equitable cannabis laws.” The event is hosted by Dust to Diamonds, Wild Flower, Marine Queenz, and Banana Bros, and hosted by cannabis connector Andre Bourque.
Artocade: Coda Signature
If you haven’t tried an edible from Coda Signature, you haven’t lived. Back to the story, we asked Coda’s marketing director, Marji Chimes, how the company gives back to its Colorado community. “Our manufacturing facility is in Trinidad, Colorado. Every year the town does an event call Artocade. It’s a parade of cars that are decorated by businesses and individuals with a passion for cars and design. That night, they have a celebration and give out awards. This year, Coda Signature won the "Community Service Award" that recognized our role as an employer and positive influence in the community."
Company CEO Mark Grindeland said about the award: “We are proud to be a part of the Trinidad community and are humbled by the recognition."
Garden of Eden: Meals on Wheels “Business of the Year”
“Over 15 years ago, Garden of Eden opened its doors to the residents of Alameda County.” That’s a heckuva run for any business, especially in the San Francisco Bay area. What has Garden of Eden done for the community during that time? For one thing, they’ve been a major supporter of the local Meals on Wheels.
The organization chose Garden of Eden as “Business of the Year” in Alameda County. They beat out Alameda County neighbors like world-champion Golden State Warriors, the Oakland A’s, Keen Shoe Company, Peoplesoft, Safeway, and the North Face, to name a few.
#ZeroHunger by 2030: Bloom Farms
Too much goodness at Bloom Farms, producer of 100 percent all-natural cannabis products grown on California family farms. “In honor of the UN’s World Food Day (WFD) on October 16, we’re doubling the amount of food bank donations and putting a spotlight on food insecurity in our local communities. Since 2015, we’ve been on a mission to help end hunger. In California and beyond, we’ve already donated over 1.2 million meals through our 1-for-1 program -- and we’re just getting started.”
Family Focus: Traffic Roots
Facebook and Google won’t take your cannabis ads? Traffic Roots will. While this entrepreneurial powerhouse is burning the midnight oil creating a global ad network that serves millions of impressions per month, they still find time to do critical face-to-face work in their own community. CEO Christian Valdez explained their local approach, “We do charity at a small scale. Last year we collected about $2k from friends and family to provide groceries and Xmas gifts to four families in the San Diego Area. This year we have a Go Fund Me Campaign to raise more contributions. Here is a link to our Holiday Charity GoFundMe campaign.“
Realm of Caring: Elixinol
“Elixinol was founded on the idea that hemp can make the world a better place -- there’s no better way to show that commitment than supporting the organizations that are important to our community,” says Chris Husong, director of sales and marketing.
In addition to giving back, 5 percent of every purchase on elixinol.com to a variety of charities from the beginning, Elixinol has been a major supporter of Realm of Caring (ROC).
“By extending our relationship beyond money, we’re better able to support the ROC community of families. ROC provides research, resources and support for those using cannabinoid therapy. We directly recommend them to Elixinol customers, but we also support their events and fundraising by encouraging our community to support them,” Husong explained.
Co-founder Paul Benhaim has been in the hemp business since the early ‘90’s. He created the world’s first hemp nutritional bar (9bar) after visiting the Himalayas and finding inspiration in the long, healthy lives of the Himalayan people whose diet is rich in Omega-3’s. But something in the Himalayas did disturb Paul: the amount of single-use plastic littering the pristine region. This lead him to author numerous books on the uses of hemp as a substitute material for everything from plastics to homebuilding. Paul and Gabriel Ettenson (Elixinol’s President) they discovered they had the same world view: Do right by the planet, do right by the community and do right by our customers -- with this philosophy, they founded Elixinol in 2014.
Veterans Cannabis Group: Give Vapes
Give believes in making the world a better place, one happy puff at a time. Each quarter, Give chooses a deserving charity to partner with and support by sharing a portion of sales proceeds.
This quarter, Give is donating a portion of its proceeds to Veterans Cannabis Group (VCG), a California-based nonprofit collective and advocacy group of Veterans for Veterans who use medical cannabis. Besides providing education, safe access, information on VA resources and benefits, the VCG provides veterans with employment opportunities in the cannabis industry. In strengthening relationships between veteran communities and their local cannabis businesses, the VCG aims to curtail the current epidemic of veteran suicide in America by easing their pain and anguish with cannabis use. Give products are available at select California dispensaries.