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United States & Cannabis: The Taxing Burden Based off of Profit

Updated: May 19, 2023

As an individual who has been a part of the cannabis industry and movement since the year CBD was legalized in Utah, I have had marvelous opportunities to meet and work alongside individuals who are very well practiced and educated in the art of healing with cannabis. My journey has evolved into many opportunities that I get to share with others, but the path of healing with sacred plant medicines such as cannabis did not start off without much oppression from the federal and local governments. This sacred plant medicine is so influential that we started Cannabis/Meditation services to help others come into a balance within as well.

I became more invested in the cannabis movement when I was connected to doctors and scientists who had been studying the endocannabinoid system and sharing their findings on a group website. Their studies, along with complete websites containing their findings would consistently and mysteriously disappear from existence. Even with a good idea of why there was manipulation limiting the access to peer reviewed information, what could one do?

Meetings and information that were breaking edge at this point in time were often discussed in-person due to the challenges of communication that this scenario presented.

The legalization of cannabis in the United States has been a topic of much debate for decades. While some states have legalized cannabis for medical or recreational use, it remains illegal at the federal level. Many advocates argue that cannabis should be legalized for its medicinal benefits, while others say it should be legalized for personal use. However, when it comes down to facts, the reluctance to legalize cannabis is primarily driven by tax reasons, and this is why:

The U.S. government has long recognized the potential tax revenue that could be generated from the legalization of cannabis. According to a report by New Frontier Data, legalizing cannabis at the federal level could generate an estimated $132 billion in tax revenue by 2025. This revenue would come from a variety of sources, including taxes on cannabis sales and cultivation, as well as payroll taxes from the cannabis industry.

Above, Cannabis Leaves

This example demonstrates that one of the main reasons why the U.S. government is hesitant to legalize cannabis is that doing so would require a significant overhaul of the tax system. Currently, businesses that operate in the cannabis industry are not allowed to deduct their business expenses from their taxes, unlike other businesses. This means that cannabis businesses are subject to an effective tax rate of up to 90%, which makes it difficult for them to operate profitably.

If cannabis were legalized, businesses operating in the industry would be able to deduct their expenses from their taxes, which would significantly reduce their tax burden. This would result in a massive loss of revenue for the government, as it would have to forgo the taxes it currently collects from the cannabis industry.

In conclusion, while there are many reasons why the U.S. government is hesitant to legalize cannabis, tax revenue is undoubtedly a significant factor. The potential tax revenue generated from the legalization of cannabis is enormous, but it would require a significant overhaul of the tax system. Until the federal government is willing to address this issue, the legalization of cannabis in the United States will likely remain a contentious and divisive issue.

-Sean Despain

New Earth Integration and Plant Medicine

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