401(k) for Cannabis businesses; impact of Impact of IRC sec. 4972 10% excise tax on nondeductible contributions

Several articles have been published to the effect that Cannabis businesses can sponsor 401(k) and other qualified retirement plans. The basic theme of these articles seems to be that IRC sec. 280E would only restrict the employer's deduction for contributions to the plan, possibly affecting only a portion of the contributions, and that the Section 280E does not jeopardize the employees' tax treatment or the trust's tax exemption. Those points seem generally sound to me, but what about the 10% excise tax on nondeductible contributions under IRC sec. 4972? Are folks taking the the position that 4972(c) only describes contributions not allowable under IRC sec. 404, and the amounts would, generally, be allowable under 404, but it is only 280E that knocks them out, so IRC sec. 4972 does not apply? That seems like a possible argument, but somewhat aggressive, and I'm surprised that the articles I've found advocating 401(k)'s for cannabis businesses don't seem to mention the IRC sec. 4972 problem. Anyone else run into this?

Agreed that 280E restricts those companies (cannabis) from deducting associated ordinary business expenses from gross income.  There is a school of thought that the Profit Sharing 401(k) Plan or Pension Plan deduction may be allowed under 263A for cost of goods sold.  The resulting deduction from gross income would lower the income tax similar to the reasonable expense deduction under 162.  There is also some authority for this under Treas. Reg. 1.263A-1(e)(3)(ii)(C) and an IRS Chief Counsel Advisory 201504011.  Would like to know other thoughts and positions on this.

ErnieG, sure. Agreed, and  I am aware of the GCA. But surely, for most cannabis businesses, a significant amount of what is contributed is going to be nondeductible. Of course, that same portion that is nondeductible would be nondeductible as salary, so you might say it's no big deal. Except for IRC sec. 4972. That is going to be a problem that will grow bigger over time, I think, as you keep contributing nondeductible amounts and do not remove them from the plan. That's what I'm focusing on.