Case Study: Cannabis Processing Equipment

This Cannabis Manufacturing client claimed $16,000 in Federal & State R&D Tax Credits!

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The R&D Tax Credit Experience with Leyton

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. – CEO

Background

This client brings food safety technology using radio frequency to the cannabis industry. Radio frequency heating is used for chemical-free and environmentally friendly food pasteurization. The client applies its patent-pending technology towards the disinfection and disinfestation of cannabis, which helps cultivators achieve regulatory compliance.

Facts Leyton Identified

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.

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

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 us through the engagement process and seeing the quality of Leyton’s R&D report &
other deliverables, 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.

I would strongly recommend Leyton. Excellent value for money & we have a platform established for next year that we can leverage.

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