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The US Government Received a $4.7 Billion Payout From Weed Taxes

NEWS
Randy Robinson
Apr 16, 2019 07:37 PM PST
The US Government Received a $4.7 Billion Payout From Weed Taxes
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Although the federal government considers marijuana a dangerous drug with no accepted medical use, it has no problem collecting taxes on state-legal weed.

The US government collected $4.7 billion from state-legal weed businesses in 2017, according to a report from Quartz.

To put that $4.7 billion figure into perspective, the highest-valued NBA team of all time, the New York Knicks, is worth slightly less, at $4 billion.

Also hitting the $4 billion mark: the prom industry, digital ink, omega-3 supplements, and the package coating industries are all worth about $4 billion each. The entirety of Canada’s legal weed market is also valued at about $4 billion.

Federal law currently classifies marijuana as a Schedule I drug, a category for deadly substances with no accepted medical use. But that doesn’t exempt marijuana businesses from reporting taxable income to Uncle Sam, regardless of whether the business is state-licensed or underground.

Related: Wealthiest Stoners of All Time

However, due to tax codes for folks handling Schedule I drugs, weed entrepreneurs cannot make the usual tax write-offs that other businesses can, such as deductions for employee payroll or licensing fees. Which means pot shops and other cannabis producers are effectively taxed at an incredible 90 percent rate, Quartz reported.

Furthermore, since US banks won’t open accounts for legal weed businesses, all payments were made in cash. With a payday of $4.7 billion, that comes to about 47,000 tons of cold, hard cash, assuming every tax payment was paid entirely in $100 bills.

How will 2018’s Tax Day fare for the federal government? Since the last day to file was yesterday, those numbers are still rolling in. But early tax data for 2018 showed recreational weed drew in over $1 billion in taxes, so it’s safe to say the feds will probably see yet another gratuitous payday for a plant it deems so dangerous that some federal inmates are still serving life sentences just for growing it.

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Randy Robinson
Randy Robinson

Based in Denver, Randy studied cannabinoid science while getting a degree in molecular biology at the University of Colorado. When not writing about cannabis, science, politics, or LGBT issues, they can be found exploring nature somewhere in the Rocky Mountains. Catch Randy on Twitter and Instagram @randieseljay Contact.



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The US Government Received a $4.7 Billion Payout From Weed Taxes

NEWS
Randy Robinson
Apr 16, 2019 07:37 PM PST
Share this article!
The US Government Received a $4.7 Billion Payout From Weed Taxes

Although the federal government considers marijuana a dangerous drug with no accepted medical use, it has no problem collecting taxes on state-legal weed.

The US government collected $4.7 billion from state-legal weed businesses in 2017, according to a report from Quartz.

To put that $4.7 billion figure into perspective, the highest-valued NBA team of all time, the New York Knicks, is worth slightly less, at $4 billion.

Also hitting the $4 billion mark: the prom industry, digital ink, omega-3 supplements, and the package coating industries are all worth about $4 billion each. The entirety of Canada’s legal weed market is also valued at about $4 billion.

Federal law currently classifies marijuana as a Schedule I drug, a category for deadly substances with no accepted medical use. But that doesn’t exempt marijuana businesses from reporting taxable income to Uncle Sam, regardless of whether the business is state-licensed or underground.

Related: Wealthiest Stoners of All Time

However, due to tax codes for folks handling Schedule I drugs, weed entrepreneurs cannot make the usual tax write-offs that other businesses can, such as deductions for employee payroll or licensing fees. Which means pot shops and other cannabis producers are effectively taxed at an incredible 90 percent rate, Quartz reported.

Furthermore, since US banks won’t open accounts for legal weed businesses, all payments were made in cash. With a payday of $4.7 billion, that comes to about 47,000 tons of cold, hard cash, assuming every tax payment was paid entirely in $100 bills.

How will 2018’s Tax Day fare for the federal government? Since the last day to file was yesterday, those numbers are still rolling in. But early tax data for 2018 showed recreational weed drew in over $1 billion in taxes, so it’s safe to say the feds will probably see yet another gratuitous payday for a plant it deems so dangerous that some federal inmates are still serving life sentences just for growing it.

Follow Randy Robinson on Twitter


Randy Robinson
Randy Robinson

Based in Denver, Randy studied cannabinoid science while getting a degree in molecular biology at the University of Colorado. When not writing about cannabis, science, politics, or LGBT issues, they can be found exploring nature somewhere in the Rocky Mountains. Catch Randy on Twitter and Instagram @randieseljay Contact.



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