The 3 Biggest Hurdles to Legalizing Marijuana in the United States

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The marijuana industry is seemingly budding before our eyes.

To our south, Mexico wound up legalizing medical marijuana in June 2017. Meanwhile, to our north, Canada is on the verge of becoming the firs

t industrialized country in the world with legal recreational weed. With the Cannabis Act passed, it’s simply a matter of counting down the days until Oct. 17, when legal adult-use sales in licensed dispensaries can commence.

Even multiple European countries have somewhat recently given the green light to medical marijuana in some capacity, be it for the dried flower, or cannabis oils.

Marijuana’s three biggest barriers to legalization in the U.S.

Then we have the United States, which is an entirely different, if not bifurcated, story.

Since 1996, 30 states have passed sweeping legislation that legalizes medical cannabis. Nine of these 30 states have also permitted the use of recreational marijuana. And, as the icing on the cake, surveys have consistently shown that the American public favors allowing the sale of adult-use and medicinal marijuana.

But in spite of this momentum, marijuana firmly remains a Schedule I drug at the federal level. Placed on par with heroin and LSD, cannabis is defined by the Controlled Substances Act (CSA) as having no recognized medical benefits, and is categorized as entirely illegal and prone to abuse.

You’re probably wondering what on earth it would take for lawmakers on Capitol Hill to reclassify cannabis, or remove it entirely from the controlled substances list. The answer involves overcoming the three biggest hurdles to legalization in the United States.

1. It’s all about the money

While a number of people are quick to point to big pharmaceutical lobbying as a reason that marijuana isn’t legal (the thesis being that pharmaceutical sales would decline as marijuana replaces traditional medicine), there’s actually a much larger dollar figure behind all of this.

As a result of marijuana’s classification under the CSA, businesses that sell cannabis are subject to a more than three-decade-old section of the U.S. tax code known as 280E. Originally rolled out in the early 1980s to fight drug trafficking, 280E today prevents profitable businesses that deal in controlled substances from taking normal corporate income tax deductions, with the exception of cost of goods. This can lead to an effective tax rate of as much as 70% to 90% of net income.

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