Do hemp farms, middle men, and retail from seed to sale get tax breaks and incentives for having a business in the US or do they get the same cash only treatment as the Cannabis industry?
This is all I could find for this exact question, and it keeps referring to the Marijuana business and not Hemp specifically, and it is 4 years old. https://www.thetaxadviser.com/issues/2019/dec/legal-hemp-deductible-expenses.html
“Industrial” hemp (i.e. for textiles, food, etc.) is now treated like any other crop. It was legalized in 2018.
Edit: It looks like there is a licensing requirement for growers, too, so it isn’t quite like any other crop.
This is medical hemp CBD, CBG, low THC below .03. It’s mainly concerning whether this business does or doesn’t have the same IRS classification as any other business, or is it considered marijuana to be specific.
As far as I can find, as long as the THC content is below 0.03% then there are no special business or tax rules. This lines up with the answer @[email protected] gave. As far as the Feds are concerned, banks are clear to work with industrial hemp growers and resellers (relevant NY Times article).
Whether banks are open to working with industrial hemp customers is a separate issue. It seems like most are waiting for the SAFER Banking Act to get some traction in Congress. That bill should explicitly confirm what is legal at the federal level in terms of banking, loads, and insurance for both industrial hemp and the rest of the cannabis industry.
This question is actually two different questions mixed together:
Do hemp farms, middle men, and retail from seed to sale get tax breaks and incentives for having a business in the US or do they get the same cash only treatment as the Cannabis industry?
To answer these two questions separately:
- There are not special tax incentives to promote growing industrial hemp. However, hemp growers can receive federal crop insurance, loans, and environmental incentives that apply to all agricultural producers.
- Industrial hemp (including CBD) is not a cash-only business like state-legalized marijuana, as it is federally legal, and banks can do business with hemp farmers without running afoul of drug money laundering laws.
There are some special federal requirements for hemp growers; they have to get a permit, file reports of where they’re growing, and identify the intended legal use of the hemp crop.
TY.
Are all clones considered as being hemp? I am asking becasue i see the 2023 farm bill is increasing the definition of hemp from .03% THC to .1%.
Will that cover any clone, even if it can produce higher THC later in its life cycle?
That increase to .1% is probably to keep existing industrial hemp farmers legal. It’s not going to have an effect on federal marijuana law. Federally-legal hemp farmers have to report their locations so that their crops can be later checked to make sure they’re not actually federally-illegal marijuana.
