Washington, D.C. Dispensary Owner Indicted for Failing to Pay $930K in Taxes

A Washington, D.C., cannabis dispensary owner is facing serious legal trouble after being indicted on 19 charges related to unpaid federal income and employment taxes.

Owner of Herbal Alternatives II Accused of Tax Evasion

Jennifer Brunenkant, the sole owner of Herbal Alternatives II, has been accused of failing to report and pay nearly $930,000 in taxes. According to the U.S. District Attorney’s Office for the District of Columbia, Brunenkant was responsible for declaring business income on her annual IRS Form 1040 but allegedly failed to do so.

Indictment Claims Failure to File Tax Returns and Pay Employment Taxes

Court documents allege that between 2019 and 2021, Brunenkant did not file income tax returns or pay approximately $800,000 in federal income taxes. The indictment further claims that she employed dozens of workers at Herbal Alternatives II but did not remit around $130,000 in employment taxes owed to the IRS.

Potential Legal Consequences of Tax Evasion Charges

Brunenkant faces significant penalties if convicted. Both tax evasion and failure to pay employment taxes carry a maximum prison sentence of five years each, in addition to possible financial penalties.

Similar Cases Highlight Ongoing Tax Issues in the Cannabis Industry

Brunenkant’s case is not an isolated incident. Last month, Massachusetts cannabis retailer Rebelle was reported to owe more than $420,000 in back taxes. As a result, the state’s Department of Revenue has taken steps to recover the debt, including the possibility of property seizures.

Additionally, Rebelle, along with two other marijuana businesses—Farnsworth Fine Cannabis and Theory Wellness—filed a lawsuit in March 2024 against the town of Great Barrington. The lawsuit seeks nearly $6 million in damages over community impact fees imposed under their host community agreements.

Increased Scrutiny on Cannabis Businesses

With the rapid expansion of the legal cannabis industry, tax compliance has become a growing concern for federal and state authorities. Cases like Brunenkant’s and Rebelle’s highlight the financial and legal risks facing cannabis entrepreneurs who fail to meet tax obligations.

As the industry continues to grow, regulatory enforcement is likely to increase, placing greater pressure on business owners to ensure full compliance with tax laws.