Giving hasn’t been easy for the cannabis industry for many reasons.
- Law – Federal law forbids any company working with the cannabis plant from deducting charitable donations, part of Internal Revenue Code 280E .
- Lack of Understanding – Most nonprofits don’t know what they can or can’t do with money from the cannabis industry. Technically, it’s illegal to accept money from an illegal entity, which federally, most companies who work with the cannabis plant are illegal. This poses a problem since the 501c3 charitable entity designation is from the federal government and thus if they accept something “illegal” run the risk of losing their 501c3 status.
- Time and Resources – It can take cannabis companies days or weeks to find a 501c3 nonprofit which will accept their contribution, whether cash, sponsorship or volunteers. And even then, the 501c3 might not actually publicize that they have accepted the contribution.