The development and selling of recreational and medicinal marijuana have dramatically increased as states across the country continue to pass legislation legalizing marijuana. Research and development are critically important for the cannabis industry’s current and future growth. Cannabis growers and other related businesses are already performing qualifying research activities in their day-to-day operations that qualify them to take advantage of the research and development tax credit.
The R&D tax credit was created as an incentive for businesses across different industries to take innovative measures when developing or improving their products, processes, or software. Companies within the cannabis industry are constantly working to expand the various strains and consumption options in order to meet the demand and growth of the industry, and are performing qualifying research and development activities in the process.
Keeping Up With the Demands of the Cannabis Industry
With the growing legalization of recreational and medicinal marijuana comes an increase in the demand for marijuana farms, pharmaceutical companies, and dispensaries. These companies are regularly coming up with more efficient methods of creating the products, and these innovations can often result in qualifying for the R&D tax credit.
Qualifying cannabis-industry related research activities include:
- Enhancing the efficiency of the growing and harvesting process
- Developing new strains of cannabis through the use of genetic and cross-breeding techniques
- Developing new systems for indoor growth
- Performing testing to improve or speed up a harvest cycle
- Developing improved technologies for delivery of cannabis-derived substances
- Creating new ways to prevent mold or plant loss
- Developing unique software analytical tools for strand identification
Don’t Miss Out On R&D
Leaders in the cannabis industry often miss out on the lucrative savings made available through the R&D tax credit simply because they’re unaware that they can qualify for it. Our tax experts at National Tax Group will perform a free assessment of your benefits and determine the credits you can earn. This industry is only going to continue to gain momentum, as is the amount of current and future businesses that are able to reap significant savings through the research and development tax credit.