Video: Can You Sell Non-Cannabis Items With Your Cannabis License?
As the cannabis industry continues to expand and mature, many cannabis businesses are exploring ways to diversify their offerings beyond the traditional cannabis products. This has led to questions about whether cannabis businesses are allowed to sell non-cannabis items using their cannabis licenses. To shed light on this topic, we reached out to Perry Salzhauer, a cannabis lawyer at Green Light Law Group, who has extensive experience working with cannabis businesses.
In the following video, which comes from our Buzzkillas series of videos, Perry Salzhauer addresses some of the key considerations for cannabis businesses that are interested in selling non-cannabis items. He explains the regulations and laws that govern what types of products can be sold with a cannabis license and provides practical tips on how to navigate this complex area.
Whether you're a cannabis business owner looking to diversify your product offerings or simply curious about the regulatory landscape of the cannabis industry, this video is sure to provide valuable insights. So without further ado, let's hear from Perry Salzhauer on whether you can sell non-cannabis items with your cannabis license.
So another question I'm getting with increasing frequency is can I sell things other than marijuana or cannabis at my retail store? Can I grow crops other than cannabis at my production facility? Can I process other botanicals? And the answer to that will vary jurisdiction to jurisdiction as to the extent to which you can do that. But to me, question is less can I, but should I? And this goes back again to the tax issue. You don't want to taint your non cannabis related activities to 280E and risk subjecting everything to 280E.
And as with everything in cannabis, there is a right way to do it from a tax perspective, and there is a wrong way to do it. And again, the answer to this question goes back to what is your accountant saying and how can we work together, the three members of the constituency to get together and come up with a way to do that.
So from a production standpoint, in most jurisdictions, in fact, every jurisdiction, you're going to have a licensed premises and you're probably only going to be able to grow cannabis on that part of your licensed premises. Now, the questions become, does your licensed premises have to encompass your entire far, if you're a farmer? The answer is no. You're going to be able to carve out a site and that's where the cannabis is. So the answer is, yeah, you will be able to continue to grow other crops on this farm. But you're gonna have to have a clear separation between the non cannabis farming practices and the cannabis farming portion.
Because you should have a separate company that runs the cannabis aspects, you're probably going to need a lease between your farm and your other company. So it complicates things a little bit. From a retail perspective, that's where the real juicy questions come up, right. So you're going to sell cannabis, you're going to sell the accoutrements of cannabis, your rolling papers, your bongs.
Can you sell things like chewing gum? Can I have coffee? All of these things? The answer in most jurisdictions is yes. But should you and how do you do that? Without having all of your sales being subjected to 280E?
If you have pre-existing banking relationships, one thing people often forget is cannabis banking is sparse, and most traditional banks will not make a cannabis business. If you have an existing business, do you want to jeopardize your potential long standing banking relationships by mixing it with your cannabis? And most people will say, no, it's not worth the risk, particularly high net worth individuals, because we've seen some very wealthy folks have long standing banking relationships terminated as a result of significant cannabis investments.
So the answer is yes, you can do this. The tricky part is how do you do it? And how do you do it more importantly, without subjecting all of the non cannabis items that you sell to 280E. Again, this goes back to having all these decisions being made with the three constituencies. You've got your legal team, your accounting team, and then your ultimate beneficial owners of the business.