Dispensary Revenue Calculator

IRC Section 280E (26 U.S.C. § 280E) disallows federal tax deductions for ordinary business expenses — rent, payroll, marketing — for any business trafficking in a federal Schedule I or Schedule II controlled substance. Recreational/adult-use marijuana remains Schedule I under federal law and is still fully subject to 280E; as of an April 2026 DOJ/DEA order, marijuana handled under a qualifying state-licensed medical program moved to Schedule III, which removes 280E going forward for those specific licensees, though a state-legal dispensary not operating under that carve-out is still taxed as modeled here. This calculator models the disallowance by taxing revenue minus COGS only (not the fuller net income figure a normal retailer would be taxed on), at an assumed flat 35% effective federal rate, which is why Est. 280E Tax Impact can be a large bite even on a store with modest operating profit.

That's the direct mechanical effect of 280E: because deductions for rent, wages, and other operating costs are disallowed, the federal taxable base is effectively just gross profit (revenue minus cost of goods sold), not the operating profit figure most businesses would be taxed on. The calculator applies its 35% assumed rate to that narrower base specifically to reflect this cannabis-specific tax treatment.

It's a fixed benchmarking assumption baked into the formula (Annual Revenue divided by 1,500), not tied to any square-footage input you provide. If your actual retail floor plan is larger or smaller than 1,500 sq ft, treat this figure only as a rough industry comparison point rather than a number calculated from your specific store's footprint.

Daily Transactions is Daily Foot Traffic multiplied by Conversion Rate (%), rounded to a whole number — so out of every 150 people entering the store at a 75% conversion rate, about 113 complete a purchase. That transaction count then multiplies by Average Ticket to produce Daily Revenue, which scales up by Operating Days per Month for the monthly projection.

Operating Profit is gross profit minus your monthly fixed costs — the pre-tax bottom line any retailer would recognize. Net After 280E goes a step further and subtracts the estimated federal tax hit calculated on the narrower revenue-minus-COGS base described above, so it reflects the harsher real-world cash position a licensed cannabis business actually ends up with after federal tax law's disallowed deductions are accounted for.