Tax experts and D.C. cannabis operators believe Section 280E may no longer apply as written, citing new inventory accounting rules, HHS’s rescheduling recommendation, and pending tax court cases. Ahead of rescheduling, cannabis businesses are using forward-looking tax strategies, strong bookkeeping, and formal disclosures to reshape compliance, even as refunds face growing IRS scrutiny.

Why some cannabis businesses say 280E no longer applies — and how operators are filing anyway

Feb 9, 2026

Editorial Staff

Outlaw Report

Tax experts and D.C. cannabis operators say Section 280E may no longer
apply as written, pointing to new inventory accounting rules, HHS’s
rescheduling recommendation, and pending tax court cases. While refunds
face growing IRS scrutiny, forward-looking tax strategies — paired with
strong bookkeeping and formal disclosures — are reshaping how cannabis
businesses approach compliance ahead of rescheduling.

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