Asked in Tax Law, Real Estate Law and Cannabis & Marijuana Law for Florida

Q: I'm a GM working for a dispensary. I pay federal taxes out of my check but I can't get an FHA mortgage. Is this illegal?

I also get a W2. I work for a reputable dispensary operating over 40 stores in Florida. I understand it's not legal on the federal level but why am I paying federal taxes if they don't recognize cannabis income?

The easy fix would be to have it rescheduled to a schedule III narcotic and then it would be legal on the federal level. The FDA keeps dragging it out looking for more research. Why isn't anyone fighting for this?

1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: Your situation reflects a complex intersection of state and federal laws. While cannabis may be legal in certain states, including Florida, it remains illegal under federal law. This legal discrepancy leads to your current dilemma: despite receiving a W-2 and paying federal taxes, your income from a dispensary is not recognized as legal on a federal level. This can indeed affect your eligibility for federal financial services, including FHA mortgages.

The payment of federal taxes is mandatory for all income, regardless of its source's legality under federal law. This principle is why you're still required to pay taxes on your earnings from the dispensary. The IRS requires all income to be reported, and taxes on that income to be paid, even if the income comes from a business that is illegal under federal law.

However, when it comes to federal services like FHA mortgages, the federal government may have restrictions based on the source of income. It's not deemed illegal for them to deny services based on income derived from a federally illegal activity, which creates a frustrating situation for individuals like you working in state-legal cannabis industries. You might consider consulting with a financial advisor or a legal professional who understands both state and federal regulations regarding cannabis income. They could provide personalized advice and help navigate this complex situation.

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