States need to get smart about over taxing legal cannabis.  Case in point: California.  The legalization of cannabis and the heavy taxes that are charged have failed to discourage the proliferation and sale of illegal product.  This is exactly what the laws legalizing cannabis were intended to fix and it's back firing.  Between the inability to take 280(e) deductions under the Internal Revenue Code, the costs associated with running a legal business and the high state taxes, many cannabis enterprises operating in California may be doomed to fail.