How Much Money is the U.S. Government Making by Keeping Cannabis Illegal?

Source: Marijuana Break

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Marijuana has only been illegal for about 1% of its entire history. Unfortunately, it comprises the last 100 years or so and the American Government, along with many others around the world, continues to resist calls to remove cannabis from the list of controlled substances under the 1970 act.

Why does the U.S. Government insist on keeping weed illegal? Politicians pretend that there is a moral issue at play. This is hard to believe when successive governments allow easy access to firearms capable of firing hundreds of rounds a minute, deadly opioids, tobacco, and alcohol. As you probably know, the real reason for ensuring cannabis remains illegal is ‘dirty cash’. While predictable, it is not a straightforward situation as we explain below.

Section 280E Makes $500 Million a Year

Section 280E is a portion of the American Tax Code and was introduced in the 1980s. It was designed to close a loophole that enabled narcotics sellers to make claims related to their illegal businesses on their tax returns. Examples included travel costs and scales! Marijuana was affected by 280E because it is a Schedule I drug. As a result, marijuana businesses can’t write off business expenses, even in states where weed is legal.

As a consequence, the IRS saves an estimated $500 million a year on those tax write-offs. According to one dispensary owner in Colorado, it is frustrating to learn that weed sellers are being treated like common drug dealers. He pointed out that the industry brought over $500 million in revenue to his state; the money was used to build schools among other things. Section 280E is effectively a ‘double tax.’

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