State-of-the-Art Federal Marijuana Tax Bills

Abstract

Recent federal marijuana tax bills address these questions:

1. What should we tax? What should be the “base” or bases of a cannabis tax? (Possible bases include: price; weight of various product types [like flower, trim, and concentrate]; and THC content.) 2. Given any base, what should the tax rate be? 3. Should medical cannabis bear full tax? 4. Should marijuana advertising and selling expenses become deductible for federal income tax purposes? (That would treat cannabis businesses like other businesses; current Internal Revenue Code section 280E bars such deductions.)

A few of the answers are unsatisfactory for tax policy and drug policy, but some of the answers are forward-looking, going beyond what has been proposed before.

Keywords: Tax, Marijuana, Cannabis