The Federal Shake-Up of America’s Marijuana Taxes

175 Tax Notes Federal 51-57 (April 4, 2022)

8 Pages Posted: 23 May 2022 Last revised: 28 Oct 2022

Date Written: April 4, 2022


Marijuana taxation is here to stay. The evergreen issues for states, before federal complications, are how much, how, and where to tax marijuana. But federal legalization could create a new, competing federal tax and eliminate the controversial section 280E selling expense tax, to which many states conform. Any federal cannabis tax changes would jolt state tax regimes, as would opening state markets to interstate commerce. Taxes in Alaska, California, Colorado, Illinois, Maine, and Nevada are particularly vulnerable to a federal shock. Ahead lies uncharted territory. Cannabis tax experiments in the laboratories of the republic and the world are playing out, including using THC as a tax base.

Keywords: Marijuana, cannabis, tax, ad valorem, THC, federal

JEL Classification: H21, H23, H25, H26

Suggested Citation

Oglesby, Pat, The Federal Shake-Up of America’s Marijuana Taxes (April 4, 2022). 175 Tax Notes Federal 51-57 (April 4, 2022), Available at SSRN:

Pat Oglesby (Contact Author)

Center for New Revenue ( email )

1830 North Lakeshore Drive
Chapel Hill, NC 27514


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