That’s why the New Jersey Society of CPAs (NJCPA) supports legislation (S3240) introduced in December by Senator Troy Singleton (D-7) that would decouple New Jersey from §280E for businesses with less than $15 million of gross receipts. While we would prefer decoupling for all cannabis businesses, it is most important for small businesses, many of which are minority- and women-owned. Larger operators generally have enough cash on hand to withstand the drain on profits that §280E will cause in initial years, but smaller businesses often do not. It could literally stifle the ability of small cannabis businesses to get off the ground.
Many of the states that have legalized cannabis have decoupled from §280E. Of the 10 states with an adult-use market, two have specifically decoupled completely, one has specifically decoupled corporations, and two have no state tax at the business level thus decoupling by default. The states that have the most robust cannabis industry, Colorado and Oregon, have specifically decoupled.