Sometimes, reading what’s coming out of Washington makes you wonder if politicians are smoking something way stronger—and way more toxic—than what’s sitting on dispensary shelves.
Case in point: A rogue squad of Republican lawmakers is currently on a bizarre crusade to hike up taxes on state-legal cannabis businesses. Yeah, you read that right.
Now, if you’ve been paying attention in Civics 101, you know the GOP’s whole brand is supposed to be about championing small businesses, cutting red tape, and slashing taxes. But apparently, all those “pro-business” values go completely out the window the second the business in question sells a pre-roll.
Let’s break down the sheer, head-scratching absurdity of this new push, affectionately known in the halls of Congress as the “No Deductions for Marijuana Businesses Act.” (Real creative title, guys.)
Right now, there’s an archaic tax code on the books called Section 280E. Because weed is still federally illegal, this code basically says that cannabis businesses cannot claim normal business deductions.
Imagine owning a local landscaping business, but the IRS says you can’t write off the cost of your mowers, your gas, or your employees’ wages. You’d be out of business by Memorial Day. That’s exactly what the government is doing to legal dispensaries. It forces independent pot shops to pay effective tax rates that are astronomically higher than the local liquor store or the pharmacy down the street.
The move to reclassify cannabis to Schedule III was supposed to be the golden ticket out of this mess, effectively killing the 280E penalty. But these lawmakers are trying to pass new legislation to keep the penalty alive, completely sabotaging the rescheduling progress just to stick it to the cannabis community.
Here is where the logic completely falls apart. Let’s pretend for a second that these politicians genuinely believe cannabis is bad and want to keep it tightly controlled. If that’s the goal, this tax plan is the absolute worst possible way to achieve it.
When a legal dispensary is taxed to death, prices have to go up to keep the lights on. And when an eighth of legal, lab-tested, safe cannabis costs an arm and a leg, what does the consumer do? They go right back to the illicit market.
By trying to bankrupt state-legal dispensaries, these lawmakers are basically handing a giant, gift-wrapped stimulus check to the illicit market. You know who doesn’t care about 280E tax codes? The unregulated street dealer who pays zero taxes, doesn’t test for pesticides, and definitely doesn’t ask to see an ID before selling to a minor.
Regulated markets are how communities stay safe, products stay clean, and youth stay away from the stash. Trying to artificially inflate costs for the good guys only empowers the bad guys.
It’s wild what the mere mention of cannabis does to people’s brains in D.C. It makes staunch anti-tax politicians suddenly love taxes, and it makes “law and order” folks accidentally advocate for cartel profits.
It is crucial to support the small business owners who are navigating this incredibly tough, highly-regulated industry—not actively try to tax them back into the Stone Age.
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