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A Problem Called Taxes

If you are looking for a very good place to open a business, the USA could be the perfect solution. The rules change according to the actual state in which you live, but generally speaking its way better to be in the United States of America than in Europe when it comes to taxes, licenses and every other variable of the private business equation. All considered we are talking about the nation where neoliberal capitalism found its home, a place where communism is considered the worst monster on earth and where “public” is usually a synonym of either “bad” or “problematic”. But is this a good place for cannabis businesses as well? According to the New York Post, not exactly.

“The National Cannabis Industry Association, a beltway group that lobbies for the budding pot industry, points out that under the Tax Code, state-legal cannabis cultivators and dispensaries cannot take ordinary business-expense deductions and thus wind up paying effective tax rates of 50 percent to 85 percent,” underlines Ed Zwirn in the article he wrote for the famous newspaper. Needless to say, taxes are a real problem for legal cannabis business. On one hand, the citizens of the USA are not used to the idea of paying so much taxes (especially when you compare American and European tax rates), but this is not the worst problem in this situation. In fact, legal cannabis is a very young commodity, but the black market has been there for quite some time. This said, if you are a careful grower with some interesting connection, why should you invest in a heavily taxed business when you can quietly walk down the black market path? This is the question many growers are asking themselves, and the answer is not always as straightforward as it might be if we were talking about potatoes or strawberries. In fact, a significant number of growers are deeply connected with the black market, which has been the only point of reference for both growers and consumers for almost 100 years.

Plus, consumers can also go online and buy quality seeds to grow their own pot: why should anyone pay more (because more taxes mean higher prices) just to get a “legal” label? The legal market needs to change, and fast. Otherwise, legal cannabis could soon become an elitist niche in an ocean of illegality, which is precisely what activists and pot-lovers want to avoid at all costs.