Lastly, there is a disguised excise tax from the federal government — Section 280E of the Internal Revenue Code prohibits business deductions against income for cannabis-related business activities.
Second, many of the societal problems associated with illegal marijuana growth and trafficking — such as crime and environmental damage — will continue.
Why has legalizing cannabis turned into a policy failure in California? Quite simply, the government wanted revenue in exchange for allowing people to use what many people still consider a harmful substance and possibly a gateway drug to something harder.
In the case of cigarettes, states with high excise taxes are more likely to have a black market for them.
Another observation is that people who constantly shout “legalize, tax, and regulate” only care about the legalize part.
State and local governments can reduce or eliminate cannabis-specific taxes in the hopes that it will reduce prices on the street.
But this can turn into another War on Drugs, resulting in more people being imprisoned.
The state and local government should consider how much legal weed they want in their borders and revise their tax laws accordingly.
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