The DEA and DOJ moved state-licensed medical cannabis to Schedule III this year. For 2026, Section 280E may no longer disallow your deductions. Most growers are still filing as if it does, and quietly overpaying every quarter.
Federally licensed to represent you before the IRS. No fear-selling, no retainer on faith.
Your photo here: sun-grown canopy or hoop house at golden hour. Shot on your phone is perfect. This is your farm, not a stock image.
Under Section 280E, the federal government let you subtract what your flower cost to produce, and nothing else. Not the light bill. Not the trimmers. Not the rent on the hoop house, the nutrients, the compliance fees, the fuel up the hill.
So you paid income tax on gross profit, on paper you never saw in your bank account. In a year when a pound sells for a fraction of what it used to, that is the difference between making it to next harvest and not.
That is what 280E did to a farm. You already know the feeling. This page is about the part that changed.
On April 22, 2026, the DEA and DOJ moved marijuana under a qualifying state medical license to Schedule III. Section 280E only ever applied to Schedule I and II. So for tax year 2026, the ordinary operating expenses 280E used to disallow, your medical operation can deduct like any other farm.
It rides on the state medical license, not on any federal registration paperwork or deadline you may have missed. If your license carries an M designation, the position is available to you.
Straight about the fine print: this is a defensible position, not yet settled law. Only the medical-designated portion qualifies, dual operators keep the two sides separate, and IRS guidance is still landing. When your return is filed, the position is disclosed in the open on Form 8275. No games.
Your estimated tax payments are the fastest place this shows up. Compute them as though 280E still disallows everything, and you send the IRS money this quarter that, on the new position, you get to keep.
That is not a refund you wait until spring for. It is cash you can hold on to before your next payment goes out. And your next payment has a date on it.
The exact number is yours, drawn from your gross, your COGS, and your operating costs. That is the first thing we work out.
Rough numbers are fine. This is an estimate to start the conversation, not a filed return.
IRS Form 1040-ES instructions & worksheet →
Two things, fixed fee, no hourly clock running while you talk. A plain-English read on your 2026 position, and a completed Form 1040-ES so you file the correct, lower estimate this quarter. Then it is off your plate.
Your designation, your medical and adult-use split, how you have been figuring estimates. No pitch deck.
Last year's return and a rough profit and loss, or point me at your books. That is the whole lift on your end.
A completed 1040-ES and a short position memo come back. You file the lower estimate. Done for the quarter.
Use the same portrait of you here as on your About page (280ea.virtuallaunch.pro/about). A real face they can place.
I've been an Enrolled Agent for years, and California has been home since I was a year old. When the rules around your farms started shifting, this became the work I wanted to be doing, for the people I most wanted to do it for.
I'm in your corner on the plant itself, for the patients it helps and the people who enjoy it, and I've kept a close eye on the tax law that lands on you for growing it. This year that law finally shifted in your favor, and it's something I can act on for you right now.
And now, not later, is the point. Your taxes run all year, through your quarterly estimates, not just at filing time. Keep paying them the old way and you overpay every quarter, and an overpayment is slow and stubborn to get back. It is far easier to hold onto that cash than to chase a refund for it later. Ten minutes on the phone, or a few minutes with the calculator up above, and you'll know what it means for your farm.
Bring your rough gross, your cost of goods, and your operating costs, or just bring your questions. In ten minutes you'll know whether this is real money for your farm this quarter.
What happens on the call
→ Is your license medical or dual designated
→ Your split between medical and adult-use
→ How you have been computing your estimates
→ Whether the numbers make this worth doing now
Jamie Williams is an Enrolled Agent, federally licensed to represent taxpayers before the IRS. This page is general information, not tax or legal advice, and does not create a client relationship. The Schedule III treatment of state-licensed medical cannabis rests on a federal order and IRS guidance that is still developing; any position taken is disclosed on Form 8275, and no specific tax outcome is promised or guaranteed. The registration and compliance decisions under the Controlled Substances Act are legal questions for your attorney. The IRS instructions and worksheet for Form 1040-ES are published at irs.gov.