The federal government does not allow businesses that sell cannabis to deduct ordinary and necessary expenses incurred to run their businesses from their taxable income. This means that a cannabis business cannot deduct: • Depreciation • Interest • Rent • Repairs • Salaries and wages This is the result of the Controlled Substances Act (CSA), which still classifies cannabis as a Schedule I drug that does not have an approved medical use in the US. This remains the case even in states where the sale of marijuana has been legalized for medicinal purposes.