Tax questions about the MORE Act legalizing marijuana

1.  The tax rate now inches up over time, landing at 8 percent ad valorem in year 5.  The tax then switches from ad valorem to weight and THC after year 5, but still works with an ANNUAL look-back to price.  If you keep looking back, why bother switching?  This switch mimics the old Blumenauer–Wyden bill switch to an annual lookback, which I thought so weird that I couldn’t believe the old bill did it, so I misread the old bill. Isn’t the main point of switching to weight and THC to keep the tax burden steady, rather than fluctuating with price?

2.  280E repeal effective date:  Say date of enactment is July 1, and marijuana is descheduled then.  Taxpayer is on a calendar year, or say a June 1 fiscal year.  280E is the law for part of the taxpayer’s tax year.  What happens?  There may be an easy answer.

3. The new ad valorem tax is effective “after 180 days after the date of the enactment of this Act.”  Are no sales contemplated before those 180 days expire?


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