COGS

COGS

Federal and state law current as of September 2026 — verify with counsel.

Key takeaways

Cost of goods sold. The main remaining deduction under 280E, as case law allows.
Use the term the way the regulator uses it.
Do not import another state’s definition.
Ask counsel before the LOI uses the word as a promise.

COGS is the file this page underwrites. Cost of goods sold. The main remaining deduction under 280E, as case law allows. Federal and state law current as of September 2026 — verify with counsel. This is educational, not a guarantee of price, timing, approval, or financing.

Why COGS matters in a cannabis sale — what breaks COGS?

COGS is how a regulator or a CPA will test the file. A forum definition does not survive Colorado or Connecticut.

How COGS is used correctly — what breaks COGS?

Used correctly, cogs is a condition you can point to in a statute, a lease, or a tax workpaper. If the LOI promises something the agency cannot honor, rewrite the LOI.

How COGS is misused — why does this change COGS?

COGS gets inflated in teasers and ignored in diligence. Diligence and transfer review exist to stop that.

Use of COGS	Broker reading
COGS in a CIM	Must match the statute, not a slogan
COGS in an LOI	If it requires agency consent, say so
COGS in a model	Label ranges; do not hide 280E
COGS vs a neighbor word	Do not swap cogs for a look-alike term from another state

File example that turns on COGS — what belongs on COGS?

Illustrative: Colorado uses cogs as a defined term and Connecticut does not. Importing the first statute into the second file is how packets bounce.

Nearby words people confuse with COGS — what belongs on COGS?

If someone says cogs and means a different glossary entry, stop and pick the right slug. The glossary index exists so COGS stays precise.

If COGS mixes medical and adult-use, apportion. The April 2026 order is not a blended gift. Dual shops that dump all SG&A into the medical column will lose that fight with a 280E-literate CPA. Cite Federal Register 2026-08176 and IRC §280E in the same memo.

Cited sources that govern COGS: SAFE Banking Act of 2026, S.4942 and H.R.9471 were introduced in 2026 and are not law. Hemp SKUs must be read against CRS IN12620 on the 2026 hemp definition and CRS IF13136; the redefinition date is 12 November 2026. Federal Register 2026-08176 is the April 2026 medical / FDA-approved marijuana Schedule III order. IRC §280E still disallows ordinary deductions on Schedule I trafficking, which is why adult-use books stay in 280E.

Read 280E next if that file is open on COGS. deal structure is the companion page when COGS needs that angle. Keep sell in the working set for COGS. Read buy next if that file is open on COGS. 280E is the companion page when COGS needs that angle. Keep METRC in the working set for COGS. Read glossary index next if that file is open on COGS. federal law is the companion page when COGS needs that angle.

Which public sources belong on this file?

Cite FDA cannabis / CBD page, IRS marijuana industry page, eCFR CSA schedules, USDA hemp production. A forum post is not a substitute.

Frequently asked questions

What does COGS mean in a cannabis sale?

Cost of goods sold. The main remaining deduction under 280E, as case law allows.

Is this legal advice?

No. Confirm the term against the statute and counsel.

Does the definition travel across states?

No. COGS in one statute is not automatically COGS in another.

Where does it show up in a deal?

Applications, LOIs, CIMs, and often the approval contingency.