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In 1982 Congress created Section 280E of the Internal Revenue Code, IRC, which significantly limited the business expenses that a cannabis company could deduct. It states "no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State