Perspective

Senator called out for bill unfairly targeting legal cannabis

April 28, 2025

Mike Khemmoro

GreenState regularly shares contributor perspectives on the industry and trends. The ideas expressed here are wholly those of their author and do not necessarily reflect those of GreenState’s newsroom.

Dear Senator James Lankford,

I’m reaching out as the owner of Mango Cannabis, a family-run business that employs 140 hardworking Oklahomans. I tried to submit the below commentary regarding your proposed bill to the state website, but due to technical errors I received, I was unable to provide my commentary in a timely manner, which has led me to pen this open letter.

I was disappointed to learn about your proposed tax-related bill, “No Deductions for Marijuana Businesses Act,” which seeks to permanently block cannabis businesses from deducting normal business expenses—even if cannabis is rescheduled. This proposal only extends the deeply unfair application of Section 280E of the federal tax code, which was designed for criminal enterprises, not state-licensed businesses. For those not in the cannabis industry, 280E prevents cannabis companies from writing off everyday business expenses that most legitimate businesses can write off.

280E: The Unfair Tax Burden on Legal Businesses

I am today calling on you, Senator Lankford, to listen to the cannabis companies operating fairly in the Oklahoma cannabis industry about why 280E shouldn’t apply to them:

280E was enacted in 1982 as part of the War on Drugs to prevent illegal drug traffickers from writing off business expenses on their federal tax returns. At the time, the intent was clear—Congress didn’t want criminal organizations to benefit from the same tax advantages as legitimate businesses. However, today, this law unfairly punishes fully legal, state-regulated cannabis businesses that follow strict compliance laws.
The result? Legal cannabis businesses are taxed at an effective rate of 60–80 percent, while most businesses pay 20–30 percent. Because of 280E, we are barred from deducting basic operating expenses, such as:

- Payroll & employee benefits (even though we create hundreds of jobs)
- Rent & utilities (even though we operate in licensed, regulated locations)
- Security costs (even though we are required by law to maintain high-security standards)
- Marketing & compliance costs (even though we are legally required to operate transparently)

While federal and state governments collect billions in tax revenue from cannabis businesses, they refuse to let us operate under the same tax rules as any other industry.

Since Mango’s launch in 2019, we have contributed millions of dollars in state and federal taxes, operating legally under Oklahoma’s regulations, creating jobs, and driving economic growth.

Mango Cannabis is not just another retail business; we are an economic force for Oklahoma, offering above-market wages, full benefits, and career advancement opportunities. Our pay structure outpaces competitors in and outside of our industry, ensuring our employees—many of whom are parents, students, and lifelong Oklahomans—can build careers, support their families, and contribute to their communities.

Unlike many industries where retail wages are stagnant, we have built a performance-driven compensation model that rewards hard work and dedication. We are not a fly-by-night operation—we are a legitimate, tax-paying, job-creating business, and yet, we are taxed as if we are running an illegal enterprise.

Who This Bill Really Hurts

This legislation does not hurt large corporations or investors—it hurts small and mid-sized businesses like ours and the workers who depend on us. The unintended consequences include:

Higher prices for consumers, driving more people to the illicit market (which contributes $0 in taxes).
Lower wages and fewer jobs, making it harder for businesses like ours to continue supporting Oklahoma families.
Decreased tax revenue in the long run, as businesses are forced to downsize, close, or relocate to more tax-friendly states.

The Reality of the Market: Fair Taxation & Adult-Use Legalization

If your goal is to support Oklahoma businesses, drive job growth, and maximize tax revenues, the conversation should be about fair taxation and full adult-use legalization—not outdated restrictions that punish legal businesses while empowering the illicit market.

The future of Oklahoma’s economy can be strengthened by allowing for adult-use sales, which would:

Increase tax revenue

Create thousands of new jobs
Eliminate the gray market, making regulation more effective
Allow legal businesses to compete fairly

Many states have already benefited from this shift, and Oklahoma has the opportunity to lead by example.

I urge you to reconsider and meet with business owners like myself and my co-owners, Kevin Pattah, Jon Pattah, and Brandon Binno, to discuss the real-world impact of this legislation and the potential for a more prosperous, well-regulated cannabis market in Oklahoma.

Do you want businesses to thrive or die? Your efforts here will make that call.

Sincerely,

Mike Khemmoro, chief operating officer and co-founder of Mango Cannabis

*This article was submitted by a guest contributor. The author is solely responsible for its content.

Mike Khemmoro Mike Khemmoro is the chief operating officer and co-founder of Mango Cannabis, a Tulsa-based multistate operator with retail locations in Oklahoma, Michigan, New Mexico and New York. Having spent over 15 years in the cannabis industry, Khemmoro's business acumen and dedication to his team has made him stand out as a true leader in one of the Midwest’s fastest growing cannabis companies.