Institutional Cannabis Lenders Community Holds First MeetingBlog Post
BMD Attorneys Stephen Lenn and Brandon Pauley have organized the Institutional Cannabis Lenders Community (ICLC), which is a community of institutional lenders including banks, credit unions, dedicated cannabis loan funds and family office/ultra-high net worth investors and are excited to announce that the group recently held its first meeting. The more than 20 participants in the ICLC, which was organized to enhance relationships among institutional cannabis lenders and provide forums for evolving best practices, includes four of the major cannabis loan funds, more than a dozen banks and credit unions, and a cross section of other organizations that are involved in institutional cannabis finance activities.
The initial virtual meeting was held on July 19th. The meeting topic was best practices for “Internal Revenue Code Section 280E for Lenders.” The presentation was offered by James B. Mann, a preeminent 280E tax attorney who was lead counsel for Harborside and argued its appeal in the U.S. 9th Circuit Court of Appeals of an adverse 280E U.S. Tax Court ruling (Patients Mutual Assistance v. Commissioner). James advises companies with respect to cannabis-tax related topics.
During the presentation, James offered insights for the cross section ICLC constituencies that were represented on the call regarding:
- The need for lenders to understand and take steps that may be available to mitigate the potentially significant consequences of 280E tax lien priorities
- Cannabis tax planning issues relevant to lenders
- Cannabis 280E due diligence, including Federal tax return red flags
At its organizational meeting in Scottsdale this past March, ICLC (Institutional Cannabis Lenders Community) participants determined to target 2 virtual and 2 in person meetings, the latter scheduled around major cannabis conferences many participants would be attending. The next in person meeting is scheduled for September 26th in Chicago the day before the Chicago Benzinga Capital Conference. The meeting will be held at the conference hotel, the Chicago Marriot Magnificent Mile.