The Center for New Revenue

What’s the precedent for retrospective tax relief like that proposed today for 280E by the federal government?  (Finding standing to challenge such relief would be hard.)

Gemini A.I. replies:

The proposal announced today (April 23, 2026) by the Department of Justice to offer retrospective 280E tax relief for medical cannabis businesses is a massive shift in federal tax policy. By encouraging the Treasury to consider relief for past years, the administration is effectively suggesting that businesses can “claw back” taxes paid under a rule that was essentially tied to the drug’s Schedule I status.

While the tax code is generally prospective, there are several historical and legal precedents for this kind of retrospective “corrective” relief.

Continue reading “Retrospective 280 relief?”

How do GA, AL, TN, and WV prevent hemp in the field or nursery (grow house) from bypassing regulation and taxation, being sold and intoxicating people? From Gemini A.I.:

1. Mandatory GPS Mapping & Site Registration

Continue reading “No seed to sale for THC in AL, GA, TN, WV”

What does it take to get a license to sell regulated intoxicating hemp in GA, TN, WV, and AL — states that had wide-open THC sales like NC now: Personal qualifications and fees. 

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From Gemini A.I.

Getting a license to sell “intoxicating” hemp products (like Delta-8 or Delta-10 [and Delta-9 — PO) has become more regulated in the South recently. As of 2026, most of these states have shifted oversight to their Alcohol and Beverage Control (ABC) boards or Department of Agriculture, requiring specific licenses and background checks.

Below is the breakdown for the four states you requested.

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1. Georgia

Georgia regulates “consumable hemp” through the Department of Agriculture (GDA).

• License Type: Retail Consumable Hemp Establishment License.
• Fees: $250 annually per retail location.
• Personal Qualifications:
  • Background Check: Required for all “key participants.” Applicants must not have a felony conviction related to a controlled substance in the last 10 years.
  • Age: Must be 21+ to purchase, but the state allows individuals under 21 to be employees (though they cannot be the license holder).
• Notable Rules: Your store cannot be within 500 feet of a K-12 school. You must also display a specific warning sign in letters at least 0.5 inches high.

Continue reading “Hemp THC licensing in Republican states”

The flat eight percent tax in Virginia’s cannabis legalization proposal is primitive and weak.  The cannabis industry must be delighted.    

Problem:  Under the Virginia proposal, when the price is $200 an ounce, the state gets $16; when the price is $100 an ounce, the state gets $8.   But taxes need to go up over time.  Think tanks left (ITEP) and right (Tax Foundation) agree.  Pre-tax prices will be high at first, then they’ll crash.  (In every state, the market matures, and industry gets more efficient.)  

Let taxes go up:  The after-tax price is what matters in battling the black market. 

Weak solution:  New Mexico ratchets up its 12 percent price tax to 18 percent by 2030, and the leading Congressional legalization bill ratchet ups from 5 percent to 8 percent.

Strong solution:  Tax by grams of THC, the intoxicating molecule.  That’s state of the art, and what Canada and Connecticut do.  Then when prices collapse, the tax doesn’t collapse, too.

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Taxes are the caboose on the train of legalization, and they don’t get much attention.  

For the record: https://www.canada.ca/en/revenue-agency/services/tax/technical-information/excise-duty/excise-duty-memoranda/edm6-3-imposition-and-payment-of-duty-on-cannabis-products.html (a lesser ad valorem tax has seen its day come and go).

Question #3 of our seven “Policy Questions” is about “how the state issues licenses (e.g., through a lottery or competitive application process).”

Reasonable minds can differ.  Here’s some speculation.  

There are trade-offs.  One factor among very many is how licensing affects timing and amount of revenue needed to regulate the market.  (Maybe revenue is the caboose on the train of regulation, and cash flow is the taillight on the caboose, but you have to start somewhere.)

Cannabis can bring in government revenue to pay for the regulation that legalization entails– but unluckily, not at first.  So the market starts off chaotically if appropriators and agencies don’t pre-fund cannabis regulation adequately somehow.  Bad for folks in the market.  Bad for the public.  

No answers, but here are some sticks to throw on the fire – options for licensing – ranked according to earliness of cash flow.  But see three undesirable Downsides to this approach at the end. 

Options

1.     Application fees for limited licenses 

Continue reading “Licensing and Revenue: For the Market Structure Subcommittee of North Carolina Cannabis Advisory Council “

MARKET STRUCTURE SUBCOMITTEE

Policy Questions

• Do you recommend a vertically integrated model (i.e., a single company controlling the process from seed to sale)? If so, do you have recommendations on what size or level?

• Do you recommend the state includes existing CBD and hemp retail entities in this new regulation model?

• Do you have any recommendations on how the state issue licenses (i.e., through a lottery or competitive application process)?

• Do you recommend the state limits the number of licenses available?

• Should there be a residency requirement for licensees?

• Should there be a capital requirement for licensees?

• Do you recommend any social equity provisions, such as license prioritization, fee waivers, or business support programs?

Pending Congressional restriction of Farm Bill Hemp THC Drugs will tax them.   Proposals before Congress would classify these drugs as “marijuana,” and put them into Schedule I of the Controlled Substances Act, at least for now.  All Schedule I substances are subject to the 280E selling expense tax.  

Will the Joint Committee on Taxation score this revenue gain?

Must this kind of back door revenue raising bill originate in the House?

Does this legislation violate Grover Norquist’s No Tax Pledge — and set up primaries for the bill’s supporters? Grover famously tolerates “marijuana” taxes, since they involve a liberating move from prohibition to taxed sales.  But cracking down on Farm Bill Drugs means moving from a free market to regulation and from untaxed sales to taxed sales. Is there some exception to the No Tax Pledge for “loophole closers”? Lots of tax increases that need to happen are loophole closers.

Now I suspect that the 2018 Farm Bill “loophole” that carved hemp drugs out of taxed “marijuana” was not scored as a revenue loser.  But supposedly no one knew that that bill was legalizing intoxicants.

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Schedule III and tax scoring, from 2015:  

Revenue loss from 280E

Farm Bill Drugs:

https://www.marijuanamoment.net/congressional-researchers-detail-divergent-opinions-on-hemp-as-lawmakers-debate-thc-ban/

Congress targets intoxicating hemp product loophole

https://www.kslaw.com/news-and-insights/congressional-crack-down-on-hemp-loophole-significant-changes-loom-for-hemp-industry

Congress targets intoxicating hemp product loophole

There’s speculation that the Trump Administration might reschedule cannabis into Schedule II rather than the predicted Schedule III.  That sounds doubtful.  To exhaust the possibilities, here’s another doubtful option — a little light-hearted speculation.

President Trump has said the following about cannabis—

“I’ve heard great things having to do with medical, and I’ve had bad things having to do with just about everything else. But medical, and, you know, for pain and various things.”

What if he wanted rescheduling for only medical cannabis into Schedule III, while leaving adult-use in Schedule I? It sounds crazy, but anything can happen these days, and President Trump calls the shots.

Continue reading “Schedule III for only medical cannabis?”