Chief cannabis correspondent Ryan Nerz talks to Grover Norquist, the conservative pundit and president of the non-profit organization, Americans for Tax Reform.
Norquist is in favor of changing tax laws, which he claims are hindering marijuana businesses:
“Tax policy says that with marijuana, like any other Category 1 drug, you cannot deduct for tax purposes all of the ordinary expenses that anybody else can in any other business.”
The reason marijuana businesses can’t take out normal deductions, Norquist explains, is because of a controversial case in the early 1980s, where a convicted cocaine and meth dealer from Minneapolis tried to take out deductions for his overtly criminal enterprise. Congress enacted tax law 280E to prevent this perceived outrage, and it has remained on the books to this day.
According to Norquist, this law is now being misapplied to legitimate (under state laws) marijuana businesses, whose taxes end up being closer to a whopping 80 percent.
Is this a case of federal overreach?
“Yeah, it is,” says Norquist. “Look…there’s a federal law for carjacking. Like 50 states hadn’t already thought to make that a crime…?!”