The state’s cannabis angel investor tax credit program will be repealed through the state’s new biennial budget, ending a short-lived initiative that resulted in $3.1 million in investments to qualified marijuana companies.
The repeal, proposed by Gov. Ned Lamont in January and included in the full budget package that passed the legislature this week, is expected to save the state $27.5 million over the next two fiscal years combined. Lamont’s office said the expansion of Connecticut’s existing angel investor tax credit to the marijuana industry is no longer needed “given the overwhelming interest in entities seeking to be part of the cannabis market.”
Cannabis businesses will no longer be eligible for the tax credit effective July 1. However, also included in the two-year, $51.1 billion budget — which was supported by Lamont and approved with bipartisan support in the House and Senate — is a financial win for Connecticut cannabis businesses when it comes to their tax liabilities.
Starting with the current tax year, the new budget allows medical and adult-use cannabis licensees to deduct, for state tax purposes, ordinary and necessary business expenses that would typically be eligible for a federal tax deduction but aren’t because of marijuana’s status as a controlled substance.
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