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Because most states with legal sales base their tax regimes partly or wholly on cannabis prices, these developments have the potential to negatively affect revenue collections.[18] The susceptibility of cannabis prices to changes in federal policy is one of the main reasons that we have previously recommended that states base their tax systems at least partly on the weight of cannabis sold, rather than structuring the entire system around the products price.[19] Conclusion The analysis in this article suggests that for a typical retailer, denying selling expense deductions under section 280E might have an impact roughly equivalent to a 6.25 percent tax on the sales price of cannabis
