Phoenix/ Politics & Govt
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Published on May 27, 2024
High Stakes Lowered, Feds Sweeten the Pot by Reclassifying Marijuana, Phoenix Businesses to Harvest Tax Break BonanzaSource: Google Street View

The federal government has tipped the scales on drug policy by reclassifying marijuana from a Schedule I to a Schedule III substance, aligning it with drugs like codeine and ketamine rather than heroin and LSD. This pivot, reported by FOX 10 Phoenix, is not so much a nod to the Arizona user—where marijuana is already legal—but a potentially seismic shift for local businesses.

In sunny Phoenix, where over a dozen legal pot shops thrive, the change could slash serious tax burdens. Under the current code, dispensaries take a hit with taxes as high as 60% of gross revenue. The reclassification is projected to reduce taxes significantly, breathing financial life into these enterprises. Demitri Downing of the Marijuana Industry Trade Association mentioned to FOX 10 Phoenix the excessive taxation, saying, "So right now, these enterprises are paying a fortune in taxes. I mean 60% of gross revenue, sometimes higher."

At the forefront of the new era is Mint Cannabis, whose COO Raul Molina told FOX 10 Phoenix, "It's incredible. It's a big change. It's definitely a different type of recreational activity." With the shackles of stifling taxes potentially being unlocked, Molina expects to expand operations, hire additional staff, and open new avenues for business lending.

But it’s not all smooth sailing. Critics and public health advocates wave red flags concerning regulation—or the lack thereof—that they believe should accompany such a switch. Executive Vice President of Smart Approaches to Marijuana Luke Niforatos revealed to FOX 10 Phoenix, "Ultimately, this keeps marijuana illegal federally. But what it does do is it gives the marijuana industry a major tax write off for all of their advertising expenses. And from a public health perspective, that's really concerning." Among their concerns is the strategy of marketing, particularly that which may target impressionable demographics with appealing flavors and imagery.

From workplace logistics, like drug testing, to broader societal impacts, Arizona braces for a complex journey. While this doesn’t exactly mean marijuana is federally legal, it does signify an embrace of the substance for medical research and business ventures, as noted by Atelier C. The prevailing sentiment among Arizona's cannabis community remains one of optimism, hoping to strike a healthy equilibrium between economic growth and public well-being.