“NORML believes that is essential that marijuana businesses be able to take tax deductions for standard expenses such as rent and employee compensation and benefits. As part of a compromise package allowing those deductions, NORML would support the continuation of non-tax-deductibility of marijuana business advertising expenses. For some citizens, advertising is a distraction, a red flag that can cause them to hesitate to support the sound policy of legalization.
“Allowing deductions for rent and employee costs would help the bottom line of small businesses and give incentives for further hiring, while acting as a preemptive move against well funded corporate controlled marijuana companies, which can afford extensive advertising. This development would encourage the proliferation of a more diverse array of smaller businesses, as opposed to the consolidation by large corporate interests. An industry dominated by smaller businesses in turn would create more competition leading to higher quality and better priced products for the consumer.”
That’s NORML’s view; here’s a tax man’s in-depth look at 280E: https://www.brookings.edu/blog/fixgov/2015/12/18/how-bob-dole-got-america-addicted-to-marijuana-taxes/