Author: Pat Oglesby

Federal illegality is not preventing the State of Louisiana from possessing and selling marijuana.  Maybe Berkeley and Oakland are too politically blue to get away with it, but that little municipal cannabis store in Washington State has been selling openly since March 2015.  Louisiana is about to start sales.

Here’s a long quote about how flagship Louisiana State University is “touching the plant,” from an official LSU website.

In 2015, the Louisiana Legislature passed the Alison Neustrom Act, which paved the way for the production, recommendation, and use of therapeutic cannabis.

The LSU AgCenter is operating its Therapeutic Cannabis Program under one of the two licenses in Louisiana. Continue reading “The State of Lousiana sells marijuana”

A friend in Vermont tells me the Legislature there insists on taxing cannabis solely by price.  Many people think Vermonters are so shrewd and some Southerners just might be a little slow, but price-only taxation is sillier than anything North Carolina has done since turning down 90 percent matching funds for Medicaid expansion.

I’m not sure this is authorized:  https://thc.legal/opinion-il-existe-un-meilleur-moyen-de-taxer-le-cannabis-legal/

But I can’t quarrel with the end note: “Le point de vue exprimé dans cet article n’engage que son auteur trop cool.”  Hahaha.

Une traduction robotique? Continue reading “Leafly article on Cannabis Tax — en français”

Tax Day Pot Poem

Dear cannabis lovers, here are the sad facts:
The public says commerce in weed must be taxed.
The “liberty movement” wants taxes to fall.
But vanishing “price” taxes undermine y’all.

@Leafly op-ed has the fine points: Continue reading “Tax policy doggerel”

I’m delighted to announce that my dear friend Sam Kamin, J.D., Ph.D., is joining the Board of Advisers of the Center for New Revenue.  Sam is an old friend in marijuana policy years; we were on a panel for the Drug Policy Alliance in Denver in 2013, not long after my first article came out in 2011.

Sam is a Law Professor at the University of Denver. Continue reading “Sam Kamin joins CNR Board”

Thanks to editor Ben Adlin, who clarified some of my muddied thinking and made the piece much more readable:  https://www.leafly.com/news/industry/opinion-theres-a-better-way-to-tax-legal-cannabis

Excerpt:

Like it or not, most voters—not to mention politicians—like cannabis taxesbetter than they like cannabis itself. Cannabis consumers supposedly make up only about 20% of the public in fully legal states. The other 80% are bystanders, wondering, in the American capitalist way, “What’s in it for me?”

Not convinced? Consider: Initiatives to legalize and tax cannabis tend to max out at around 57% of the vote, if they pass at all. Standalone cannabis tax initiatives, meanwhile, routinely get 75% to 80%. And no state has legalized commercial sale of nonmedical cannabis without taxing it.

In evaluating the Tax Foundation’s views on taxes, it’s useful to know that the organization considers itself part of “the liberty movement.”  To me, that indicates an aversion to taxation in general. That’s not un-American, but when the Tax Foundation criticizes a tax plan, that criticism might arise from a concern that the tax is too effective, and taking too much money from the private sector.  See “States Should be Wary of ITEP Marijuana Tax Policy,” https://taxfoundation.org/itep-marijuana-tax-policy/.  The original ITEP report, not tax-averse, is at https://itep.org/five-years-in-cannabis-tax-haul-rivals-or-exceeds-alcohol-taxes-in-many-states/.

The Tax Foundation’s support for taxing cannabis by price is based on its hope for low after-tax prices.  Low prices are “a feature, not a bug, of legalization.”  Sure, low prices help the fight against the black market, but cheap weed makes my public health friends nervous — because it low prices make it easier to get for kids and for the minority of consumers who overdo it.  And taxes offset low pre-tax prices — and then there’s the revenue.  Sure, revenue may not be declining in states with priced-based taxes, but it would be much higher with weight- or THC-based taxes.

The tweet below, indicating that working for the Tax Foundation is “a career in the liberty movement,” was retweeted by the Tax Foundation – an imprimatur.

 

 

 

 

 

 

Colorado de facto taxes cannabis bud now at 27 cents a gram, trim at 14 cents a gram, wet whole plants at 5 cents a gram, bud for extraction at 8 cents a gram, and trim for extraction at 6 cents a gram. Those rates apply to vertically integrated operations and related party transactions, where an actual arm’s-length transaction does not happen.

Those tax rates are 15 percent of the “Average Market Rate,” updated from time to time at https://www.colorado.gov/pacific/tax/marijuana-taxes-file: Continue reading “Colorado’s Latest Per-Gram Tax Rates”

Patrick Oglesby, former Congressional tax committee staff lawyer and founder of the Center for New Revenue, a North Carolina-based tax policy nonprofit, has been named to head a new IRS-Treasury Task Force on cannabis tax policy.  IRS Chief Counsel W. Paul Wilkins said, “We welcome Pat back to government service.  With marijuana legalization looming on the federal level, the executive branch needs to weigh in – and to have someone work with Congress to develop tax laws we can effectively and efficiently administer, including a marketing-focused substitute for 280E.” Continue reading “IRS Opens Cannabis Tax Task Force”

University of Texas-Arlington Professor Roger Meiners proposes a tax on robocalls in the Wall Street Journal.  The rate would be one cent per call.  To make it work without litigating which calls are unwanted, he would apply it to ALL calls.  That’s simplicity over fairness.

He proposes:  “Even a chatterbox who makes 50 calls a day would pay a mere $15 a month” for 1500 calls.  That seems pretty doggone low.

Since we need to identify the phone that is making the calls, can’t we start the tax, like income tax, with a standard deduction per phone number?  Give every number 1500 calls a month.  So make 1500 calls or fewer, you owe no tax.  For 1600, you owe $1 ((1600 -1500) x $.01) .  That seems fairer — if it’s doable. Continue reading “Tax on Robocalls — Making It Simple”

How should taxpayers and the IRS treat logos under 280E?

A cannabis seller’s removable logo may leave  the object to which it is affixed deductible.  A non-removable logo, I’d guess not, but I’d welcome hearing the other side of the question.

Tax law so far has put little weight on the line between cost of goods sold and selling expenses.  A singular exception is section 280E:  Sellers of cannabis can deduct only cost of goods sold, so advertising and marketing expenses lose out.  Plain packaging of cannabis is deductible, but how about packages with branding, or logos? Continue reading “280E and Logos”

To replace a tax or fee on opioids, discussed here that has been ruled unconstitutional, Governor Cuomo’s New York budget proposes a straightforward opioid tax based on morphine milligram equivalents (MMEs):

The tax is would be a quarter of a cent ($.0025) per MME if wholesale the cost per MME is less than fifty cents ($.50).

The tax is would be a cent and a half ($.015) per MME if wholesale the cost per MME is greater than or equal to fifty cents.

So weak opioids would taxed less than strong ones.  Can’t the user just take a lot of weak opioids and get the effect of one strong dose?  Are opioid products so different that they merit discontinuous tax burdens?  And why have a flat tax amount once a threshold is reached? Continue reading “Does New York’s opioid tax idea make sense?”

I was disappointed to see the usually reliable Tax Policy Center repeat the message of the cannabis industry and the libertarian right, saying that “high taxes” on marijuana in California are to blame for slowing revenue growth. Continue reading “Licenses, not taxes, are the main problem in California”

A fair argument against weight-based taxes on raw marijuana plant material is that different parts of the plant need different tax rates.  So categories are needed.  A particularly difficult line to draw may be that between bud (flower) and trim (leaves).  That topic has been covered here, in a link below in my message to the California Department of Tax and Fee Administration via www.cdtfa.ca.gov/contact.htm. Continue reading “How is bud-trim line working in California?”

Chapel Hill, North Carolina, February 19, 2019. The Center for New Revenue today announced that Professor Douglas A. Berman of Ohio State University’s Moritz College of Law has joined its Board of Advisors. Professor Berman holds the Newton D. Baker-Baker & Hostetler Chair in Law, and is Executive Director of the Drug Enforcement and Policy Center.  A graduate of Princeton and the Harvard Law School, where he was an editor of the Harvard Law Review, he has written widely on drug policy, criminal law, sentencing, and more.  He operates the Marijuana Law, Policy & Reform Blog, http://lawprofessors.typepad.com/marijuana_law/

“When the Center for New Revenue began in 2011, the study of cannabis legalization policy was in start-up mode.  Professor Berman brings our Board beyond the friends and family stage,” said Center founder Pat Oglesby.  “Now the stakes are growing.  Doug Berman brings recognized expertise to the expanding discussion of cannabis policy.  It’s an honor to have him join the Center’s Board.”

Here is a draft Boston ordinance endorsed by Shaleen Title, MA marijuana czar. Boston ordinance Shaleen 27109002052019120048652

The draft is embedded in a long city agenda.  Click on the link, and search for “minority-owned.”

My talk given today at 1:30 PST at North American Cannabis Summit, http://northamericancannabissummit.org, in Los Angeles.  summit  final nacs_jan_29_2019.

Description
Public health policy for cannabis needs a government revenue component, and taxes on cannabis (or profits from government sales) can help arrive at a price for consumers that both modulates consumption and marginalizes the illegal market. However, a lot of current tax schemes are weak, flawed, and rigid. Early, primitive taxes fail when pre-tax prices collapse, and they inevitably will as the market matures. This session will compare cannabis revenue techniques and a variety of jurisdictions’ revenue laws, explain why many current cannabis taxes do not serve public health, and evaluate possibilities of improving cannabis revenue laws.