Earlier this month, the Congressional Research Service (CRS) released a report that recommended low federal cannabis taxes to avoid unfair pressure on the industry.
According to the report, cannabis advocates who claim that legalizing the drug would provide a new tax revenue source for the government may not be considering the potential economic impact of overburdensome taxes on financially strapped cannabis users and companies. The report says that high-priced cannabis products have the potential to send consumers to illicit markets, “in turn jeopardizing recreational marijuana’s economic potential.” The CRS says these pressures could cause uncertainty for cannabis businesses and negatively imact their ability to provide employment.
The report also predicts that higher tax rates will deter new customers from ever trying weed, “which may be a policy goal for some lawmakers.”
The CRS recommends that legislators direct the Bureau of Labor Statistics and the Bureau of Economic Analysis to investigate the potential economic impact of federal cannabis taxes before pursuing any legislative action.
The Drug Enforcement Administration (DEA) is currently considering a recommendation from the Department of Health and Human Services to reschedule cannabis as a Schedule III drug, which will reclassify it as having some medical use. In a statement, the CRS said it could be “likely” that the DEA will accept the recommendation.
New Mexico lawmakers in 2021 opted for a 20 percent cannabis excise tax that is set to increase in the coming years. Legalization advocates and architects of New Mexico’s Cannabis Regulation Act justified both the current rate and the expected increases as the sweet spot to knee cap the illicit market, but also generate revenue.
H/T: abq.news
You can view the whole article at this link Blunts: Congress’ Research Says Keep Weed Taxes Low
