New Jersey dispensary accounting built around Section 280E

• Dispensary bookkeepingInventory, cash and point-of-sale records reconciled every month.Learn more about Dispensary bookkeeping →
• Federal & NJ returnsFederal returns under 280E and New Jersey returns without it.Learn more about Tax returns →
• PayrollBudtender and manager payroll, filings and year-end forms.Learn more about Payroll →
• IRS examinationsRepresentation when the IRS examines a 280E return.Learn more about IRS audit help →

We provide accounting and tax services to dispensaries licensed by New Jersey’s Cannabis Regulatory Commission. Cannabis remains subject to federal law; questions about legality belong with your attorney.

Section 280E as of November 2026

• The rule. Section 280E bars deductions and credits, other than cost of goods sold, for a business trafficking in a Schedule I or II controlled substance.
• Medical moved. A federal final order in April 2026 placed state-licensed medical marijuana in Schedule III. Medical sales by an Alternative Treatment Center after the change are no longer subject to 280E.
• Adult-use did not. Recreational (adult-use) cannabis remains in Schedule I and fully subject to 280E. A broader DEA proceeding on all marijuana is still pending, with no final rule as of this update.
• Both licenses under one roof. Dispensaries selling medical and adult-use cannabis need a reasonable, documented method for splitting shared costs such as rent, payroll and security between the two.
• Earlier years. Whether rescheduling affects returns for years before the change is unresolved, so don’t amend on that basis without advice.

Cost of goods sold is where the work is

For a retailer, cost of goods sold is mainly what you pay for product plus inbound freight and costs directly tied to acquiring it. Courts have rejected using Section 263A to move ordinary operating costs, such as general payroll and rent, into inventory under 280E. What helps is an inventory system that ties to the state’s tracking records, clean purchase documentation and a physical count you can defend.

New Jersey taxes

• No 280E on the state return. Since tax years beginning in 2023, New Jersey lets licensed cannabis businesses deduct ordinary business expenses for both the Corporation Business Tax and the Gross Income Tax. Your New Jersey return and federal return will show very different numbers.
• Sales tax. Adult-use sales carry New Jersey’s 6.625% sales tax. Medical cannabis is exempt.
• Local transfer tax. Towns that allow dispensaries can impose a cannabis transfer tax of up to 2% on retail sales, which the dispensary collects and remits to the municipality.
• Social Equity Excise Fee. The fee on cultivator transfers is set each year by the Cannabis Regulatory Commission and flows into your product cost.

Cash and controls

• Daily drawer counts and deposit reconciliations, with variances explained the same week.
• Form 8300 for cash received over $10,000 in one transaction or related transactions.
• Payroll run like any other employer, with federal and New Jersey payroll taxes filed on time.

Frequently asked questions