Ricketts, Lankford Introduce Bill to Block Tax Breaks for Marijuana Businesses

February 10, 2025

WASHINGTON, D.C. – Recently, U.S. Senators Pete Ricketts (R-NE) and James Lankford (R-OK)introduced the No Deductions for Marijuana Businesses Act. The legislation will prevent marijuana businesses from deducting business expenses from their federal taxes. 

“The federal government should not be subsidizing an industry that profits from addiction and undermines public safety,” Ricketts said. “This bill ensures that marijuana businesses do not receive tax breaks while they continue to violate federal law.”

“Marijuana doesn’t make our families stronger, our streets safer, or our workplaces more productive.”said Lankford. “Businesses who sell federally illegal drugs—including marijuana businesses—shouldn’t get federal tax breaks. This bill clarifies federal tax law to make sure a federally illegal product does not have a federally legal tax deduction.”

“The federal government should not be in the business of giving tax relief to the federally illegal, addiction-for-profit marijuana industry. This legislation would prevent deficit increases while ensuring that taxpayers don’t foot the bill for the revenue gap made by tax write-offs for people who choose to violate federal law and poison our kids,” said Dr. Kevin Sabet, President and CEO of Smart Approaches to Marijuana (SAM).

Since the Tax Equity and Fiscal Responsibility Act of 1982, tax law has prevented businesses trafficking Schedule I or II drugs from deducting business expenses. However, if the Biden Administration’s push to reschedule marijuana is successful, marijuana businesses would be able to take business deductions. This bill preempts that loophole and ensures that marijuana businesses would not be able to deduct business expenses from their taxes. 

Bill text can be found here.