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As the cannabis industry continues to evolve, with new product suites, consolidation of companies, and innovation in the production cycle, another innovation in sales is taking the spotlight, dubbed “farmgate.”
Despite lobbying by many Fortune 100 companies and strong bi-partisan support to retain the deductibility of research and development (R&D) costs, 2022 brings an unexpected change for companies in the manufacturing, technology, SaaS, and life sciences industries. Those companies with significant R&D costs, including software development costs, will now be subject to mandatory capitalization, for U.S. tax purposes, as an intangible asset. This can have a significant impact on their 2022 financial statements and cash flows, as they will no longer be allowed to deduct those expenses in the year incurred.
Just over three years since adult-use cannabis was legalized in Canada, the Canadian cannabis market has experienced its share of rise and falls, with the Cannabis Index reaching its post-legalization high in Q2 2019 (more…)