Legal Cannabis Companies Pay Insane Tax Rates Thanks To A Minnesota Speed Dealer
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Tax Burden: state legal cannabis companies pay under a tax code created to discourage illegal drug trafficking.
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In 1975, Jeffrey Edmondson, a drug dealer based in Minneapolis, filed his taxes. As a self-employed man in the illicit drug trade, he had a good year—he sold 1.1 million amphetamine pills, five ounces of cocaine, and 100 pounds of marijuana. And like any other God-fearing, tax-paying American business owner, he wanted to deduct standard business expenses.
On his tax return, Edmondson recorded $105,300 in costs related to selling speed, weed, and coke during the taxable year of 1974. He also itemized two-thirds of the 29,000 miles he put on his car that year, $250 for a flight to San Diego, and $200 for food and entertainment expenses during a business trip. There was also $50 for a scale, $200 for packaging supplies, and $180 in long distance phone calls. Since Edmondson ran his business from his apartment, he deducted two-thirds of his rent.