Connecticut is repealing a program that provided a tax credit to marijuana industry angel investors while changing its tax rules to permit cannabis business expense deductions from state taxes.
The tax credit program had led to $3.1 million in cannabis industry investments, according to the Hartford Business Journal.
That program is now unnecessary “given the overwhelming interest in entities seeking to be part of the cannabis market,” according to the office of Gov. Ned Lamont.
The repeal, proposed by the governor earlier this year, passed the state Legislature this week as part of a budget package.
The tax credit for cannabis investors expires July 1, which will reportedly save Connecticut $27.5 million over the next two fiscal years.
Despite the tax credit’s demise, Connecticut is offering some relief to medical and adult-use marijuana businesses.
When filing their state taxes, those cannabis operators now will be able to deduct business expenses that they are unable to deduct on their federal taxes because of ongoing federal marijuana prohibition.
“The Connecticut Medical Cannabis Council, Connecticut Cannabis Chamber of Commerce, and several local and multistate cannabis operators supported the tax deduction legislation,” the Business Journal reported.
Adult-use marijuana sales in Connecticut launched in January, with recreational and medical sales exceeding $22 million in March.
