Trulieve Reclaims Millions in Tax Money

Stephen Andrews
07 Mar 2024

Cannabis multistate operator Trulieve revealed that it has reclaimed $113 million worth of tax money as it challenges what it owes under the punitive Section 280E of the Internal Revenue Code. The Florida-based operator initially asked $143 million back in October 2023.

Cannabis company Trulieve announced its plan to seek federal tax refunds back in October 2023. It’s the first company that has managed to get back money from the 280E federal deductions. 

The multi-state operator said it has received $62 million worth of tax refunds during the fourth-quarter of 2023, according to a company report released Thursday, Feb. 29. 

The same report further says that the Florida company has received “a total of $113 million in refunds to date,” including a sum of $50.3 million that was restituted in January 2024. 

Trulieve Executives Didn't Share Tax Refund Details

During a Feb. 29 earnings call, Trulieve’s CEO Kim Rivers was asked if the company’s tax refund strategy is applicable to other cannabis operators. 

Rivers, who referred to the arrangement as a “trade secret,” said that the company’s tax refund strategy is “in large part specific to our position and our organization.” 

“We are not going to be sharing that information publicly, given the fact that it could be in a litigation posture,” she said. The information might become available in case there’s any court filing, Rivers added. 

Wes Getman, Trulieve’s Chief Financial Officer said during the earnings call that “if the 280 burden is lifted, Trulieve could realize hundreds of millions of savings in the next few years.” 

Both Rivers and Getman mentioned that should the Drug Enforcement Administration effectively move marijuana from the Schedule I substances list to Schedule III, 280E would no longer apply. 

Section 280E is only active for operators who work with controlled substances in the Schedule I and Schedule II lists, and it currently prevents cannabis operators to deduct ordinary business expenses like other businesses. 

Trulieve was also rejected for a separate sum of $1.2 million. Getman said that the company is still accruing money to settle its tax liabilities in the face of uncertainty. 

“We also received correspondence denying one amended return amounting to $1.2 million. Due to the unknown final outcome of this tax position, at this time, we continue to accrue an uncertain tax position on our balance sheet,” Getman said during the call.

“Until this process reaches its final resolution, we anticipate the uncertain tax position will increase over time. We will continue to make timely payments as an ordinary corporate taxpayer,” he said. 

Truilieve’s balance sheet ending Dec. 31 exposes $180.4 million in uncertain tax position liabilities. The sum generally relates to Trulieve’s position on 280E tax refunds, according to a regulatory filing. 

There are a number of ways this situation might unfold in the future. Trulieve could eventually take the IRS to court if it wants to pursue additional 280E tax refunds. If Trulieve secures all its 280E claims, we might also never know the legal basis for the claims. 

On the other hand, the Florida-based operator could still face an IRS audit, and there’s also the possibility that the IRS takes the refunded money back. 

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Stephen Andrews