One Change to the U.S. Tax Code Would Dramatically Drop the Price of Cannabis

Everyone likes things to be cheaper, but unfortunately that's not how the world works. There is a way, however, for the price of cannabis to drop pretty steeply, if Congress is willing to do so.

Section 280E of the U.S. tax code states that businesses that sell products that are illegal at the federal level cannot take normal corporate tax deductions. Obviously cannabis companies are one of the few industries in America that are affected by this. As a result, marijuana businesses don't get the same tax relief as other businesses, which often means they need to put a higher price burden on customers. 

Removing section 280E would lower the tax burden on cannabis companies, and likely result in lower prices for customers. Many people on Capitol Hill are interested in doing so, and obviously marijuana lobbyists are ardently trying to make it happen. However there is some resistance to the idea, primarily regarding the debate between medical and recreational.

Many lawmakers seem open to removing section 280E for medical marijuana businesses, but not recreational ones. But people in the industry believe that it should be removed to all cannabis companies, especially since recreational will likely overtake the medical market in the coming years. 

Of course, considering how hard it is for popular marijuana bills that the majority of Americans support to pass Congress, perhaps this is still pretty far down the road from reality.

(h/t Forbes)


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