Case Study

R&D Case Study: Even Cannabis Companies Can Qualify!

    • Jan 08, 2021
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cannabis processing

$16,000 in Federal & State R&D Tax Credits!

Discover how a cannabis company, working on improving methodology processes and equipment, was able to qualify for government tax incentives.

How They Were Innovating

Client’s objective was to drastically reduce the yeast and mold count without overheating their crop, which can compromise the quality of the product through e.g. THC or terpene degradation. It was found that by implementing a ‘temperature hold’ feature, pathogens can be reduced below compliance levels while preserving the key biochemical attributes of cannabis.

We also identified specific pre- and post-treatment processes as qualified R&D activity. This included an improved bioburden evaluation process and the sampling methodology, which underwent a series of refinements to guarantee the integrity of the final result.

Impact of the R&D Tax Credit

The client initially engaged with Leyton to explore the opportunity with federal R&D Tax Credit. After reviewing their financial information and understanding the location where the qualified activities were performed, we informed them about the lucrative California R&D State Credit. The client was hesitant in claiming state credits, as they would not be able to have immediate benefit but can only roll forward the credit to offset future state tax liabilities.

After collaborating with our experts, the client was convinced of the value in claiming state credit. After consulting with their CPA, Leyton was able to help them claim the federal R&D Tax Credit to offset payroll tax liability and claim California Tax Credit to reduce future income tax liability.

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The Leyton team has an excellent process driven methodology. The level of technical understanding of our technology and R&D projects was very high. And they delivered on time. I would strongly recommend Leyton. Excellent value for money & we have a platform established for next year that we can leverage.

Do you own a hemp farm? Discover how you qualify today.

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