This is from Vox:
... Due to a section of the tax code known as 280E, many state-legal marijuana businesses have to pay taxes on basic expenses like rent, employee salaries, and utility bills — unlike other legal businesses, which are allowed to deduct these types of expenses.
For some businesses, this can drive their effective tax rates to 70 to 90 percent of their profits, which is enough to force many shops out of business. In comparison, other types of businesses can expect effective tax rates closer to around 30 percent.
That doesn't sound very "fair and equitable." In fact, it feels quite arbitrary, perhaps even "manifestly" so.
There's no legal trade in marijuana, but there is some cross-border investment in this growing industry:
Over the past few weeks [the Canadian company] Affinor Growers Inc. has made 3 major announcements, advancing its plan to mass produce high quality, in-demand produce and pharmacy grade plants for global distribution. The company is currently working toward becoming a grower of premier medical marijuana and will soon begin producing other major cash crops such as romaine lettuce and strawberries.
To that end, Affinor recently announced the acquisition of a 49% interest in Good to Grow LLC, a medical marijuana dispensary and grower located on Washington’s Olympic Peninsula.
So, maybe there's a NAFTA Chapter 11 lawsuit to be brought by a Canadian company who feels aggrieved by these outrageous tax rules?
(I thought I had seen an exemption for tax measures in some investment treaties, but I couldn't find it in Chapter 11. Even if that did exist, though, this wouldn't be a challenge to the taxes per se, but rather to the associated regulations.)
