Marijuana Business Magazine March 2019

Marijuana Business Magazine | March 2019 54 Day A New reduce their tax burdens, laid out some basic federal tax tools to brush up on before sitting down with a tax expert: • R&D Tax Credit: This credit sub- sidizes work that seeks improved efficiencies, business performance, risk reduction or new technology. The R&D Tax Credit could apply to things your company is already doing but couldn’t deduct under 280E. Hir- ing a tax-reduction specialist is your best bet to finding R&D credits. • Property depreciation: Business- es can accelerate depreciation on commercial assets, such as a green- house or manufacturing facility. Depreciation can occur even faster for a business' personal proper- ty, such as extraction equipment within a building or even the walls and lights. “We can carve that out and it’ll depreciate over five, seven or 15 years as opposed to 39 years, which is traditional depreciation,” Covi said. • Cost segregation: This is where a business conducts a study of its own assets and costs to capture other depreciable assets it might be missing. Businesses can then use the cost-segregation study to force a reduction in their property taxes, because the personal business property is now depreciating faster than the real property. • Work Opportunity Tax Credit: This federal tax credit incentivizes the hiring of certain employees who’ve faced obstacles landing a job, including veterans and ex-convicts. These credits start at about $900 per hire and can go up to $9,600, with an average credit of about $2,400, Covi said. HOPE ON THE HORIZON The Farm Bill’s many implications will take years to play out. The biggest challenge for hemp entrepreneurs may be surviving market volatility without losing focus on the plant and bringing it to the public. “There’s this huge opportunity to jump on it now,” Medterra’s Hartenbach said. “People feel like they need to act now or never or grow their business. “But I think doing things the right way, and not taking shortcuts, will really benefit them.” Source: Hemp Industry Daily © 2019 Hemp Industry Daily, a division of Anne Holland Ventures Inc. All rights reserved. Annual U.S. Hemp-Derived CBD Retail Sales Estimates: 2019-2023 2019 2020 2021 2022 2023 $0B $1B $2B $3B $4B $5B $6B $7B Total Estimated Retail Sales $900M - $1.1B $1.5B - $1.9B $2.5B - $3.0B $4.0B - $4.8B $6.1B - $7.5B