Building on the information presented in An Overview of Legalized Cannabis: State Laws, Taxation, and Ethics, Nick Richards explores in more detail the impact of IRC §280E on the cannabis industry. Topics covered include ethical issues, tracking systems, entity formation, as well as record keeping. With the onset of the recreational cannabis industry, state and federal marijuana taxes, at high rates, have incentivized regular income, excise, and sales and use tax audits. Be ready.