Tag: Rolling Stone

Congress, Pass a Jobs Bill! Legalize Cannabis.

It’s an understatement to say that there’s a lot on the plate of our nation and leaders. While our economy has started to improve, much more still needs to be done and it is imperative that we learn to adapt quickly and think about how we can best address our needs into the future, and not just plan for “the last war”. Over the past year, one of the few economic bright spots has been the cannabis industry. Legalized states have produced thousands of new jobs and generated millions upon millions in additional revenue, while the cannabis industry, with one hand tied behind its back, has emerged as an essential, multi-billion dollar industry. Ending federal prohibition will allow the cannabis industry to truly flourish with a similar tax code and access to banking services like other business sectors. As Rolling Stone reported, ending cannabis prohibition could lead to a better economic revival in states like Michigan that have lost manufacturing jobs, and all across the land:

For example, according to a recent report by the cannabis media platform Leafly, there are more legal cannabis professionals nationwide than there are electrical engineers, dentists and paramedics. In Michigan, more than half of those cannabis-related jobs were added just in 2020 alone. Referring specifically to Michigan, the report dryly notes, “In a state known for its auto industry, the number of cannabis workers is now roughly equal to the number of auto repair mechanics.”

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In 2020, according to Leafly’s findings, our industry sold $18.3 billion worth of product and supported 321,000 full-time jobs. The cannabis industry created this value last year without access to the regular security of banking and without even basic insurance programs available to every other business. Across the country, the industry did it with a concurrent illicit market competing against us every step of the way. We did it without being able to sell products between states as we do with automobiles or soybeans. Our industry is the industry of the 21st century — and it may just save us all.

This has undoubtedly been a terrible time in our country, but while so many other consumer industries have been shaken, cannabis has flourished during the darkness, proving that it can be the job creator and economic driver we need as we look to a much brighter future.

As Congress debates some serious issues about where to spend our hard-earned tax dollars and best move our nation forward, they shouldn’t ignore cannabis legalization for too long. With broad bipartisan support, sweeping Reefer Madness prohibition into the dustbin of history is a win-win for our nation. Thanks to hardworking advocates, legalization is here to stay in 17 states already, and will come to most remaining states eventually. For once, our legislators can embrace the future and help bring more jobs and revenue to communities that have suffered so much over the past year.

When you support Kind Leaf in beautiful Pendleton you are supporting an Oregonian-owned craft cannabis boutique that supports the local economy and community.

Reform the 280e Tax Code: The Feds Should Stop Profiting off Illegal Cannabis

While the huge sales numbers in legal states make headlines, they don’t tell the real story about the cannabis industry. The macro numbers of gross profits and revenue demonstrate the potential of the industry, but hidden within record-breaking sales reports are the trials and tribulations facing small businesses and entrepreneurs. Regulatory hurdles and over taxation are extremely burdensome to the industry, but the biggest obstacle to unleashing the potential of the cannabis industry (save for prohibition) is the 280E IRS tax code that prohibits cannabis businesses from deducting normal business expenses from their federal taxes.

While giant corporations, especially multinational ones, may be able to weather their tax burden, mom and pops are surviving on very small profit margins after they pay their taxes. Rolling Stone reported on how the 280E tax code allows the United States federal government to reap billions of dollars because of cannabis’ illegality at the federal level:

Because of the discrepancy between state and federal law, legal marijuana businesses are often stuck paying twice as much as normal businesses – effective rates of up to 70 percent – in federal taxes. Exactly how much extra tax revenue makes it to the feds because of marijuana’s illegality is not entirely clear. But last December, the Congressional Joint Committee on Taxation responded to a request from Colorado Senator Cory Gardner with the projected additional amount that will be collected from legal cannabis businesses between 2018 and 2027 if the drug remains federally illegal: $5 billion.

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The federal government’s legal weed windfall can be traced back to a little tax code provision called 280E, which says that anyone trafficking in Schedule I or Schedule II drugs cannot take deductions or receive credits on their taxes. It was written in the 1980s to prevent the Scarfaces of the world from writing off the cost of packaging for methamphetamine. But now that a majority of states have legalized the medical or recreational sale of marijuana, the 280E tax provision has become a key point of contention between the federal government and state-legal businesses.

So where did the Joint Committee on Taxation’s numbers come from? Several marijuana industry groups have done their own estimates of 280E’s impact, but the numbers that seem closest to what the JCT put out were developed by a Washington D.C. economic research firm hired by Tom Rodgers, a Native-American advocate and lobbyist. About 15 years ago, Rodgers was the whistleblower in the infamous Jack Abramoff case, helping authorities to uncover criminal lobbying and bribery activities that ultimately led to convictions for 21 people, including a congressman and two former Bush White House officials. These days, Rodgers has expanded his oeuvre to include some work on behalf of the cannabis industry. In 2016, in conjunction with a chain of Colorado marijuana dispensaries called the Green Solution, Rodgers commissioned the research firm to develop an analysis of 280E in the hopes of ultimately getting the provision repealed.

While we’ve seen cannabis legalization gain popularity, political support has also increased. We’ve seen Congress pass protections from federal arrest and prosecution for medical providers and the House has passed protections for adult-use businesses and banking services (but the Senate needs to catch up). Eventually, we’ll see some movement on the 280E tax code. Hopefully soon, Uncle Sam will stop profiting from keeping cannabis illegal and give the hard-working members of the cannabis industry, the same tax deductions that other businesses enjoy. If the cannabis community will make a point to support locally-owned cannabis boutiques like Kind Leaf, that money will flow back into local communities, where that green can do the most good.