California Inititative Would Help Medical Marijuana Dispensaries Fight Back Against ‘Hostile’ IRS
A new voter initiative in California to legalize and regulate the general use of marijuana could help protect medical pot dispensaries from the Internal Revenue Service.
The Regulate Marijuana Like Wine campaign seeks to repeal prohibition of marijuana for adults, place strict state oversight on the drug and allow hemp agriculture.
While the overall effects of such an initiative on the medical marijuana industry are unclear, organizers say it would give dispensaries tools to defend themselves in the event of an IRS audit.
This is a particularly significant issue for the medical pot community, as dispensaries and growers are unable to claim most of the tax breaks given to other businesses. That makes it harder to squeeze out profits, and it puts marijuana dispensaries at a huge disadvantage.
The situation has been murky for quite sometime, and some dispensaries have been able to claim the tax breaks yet avoid an audit. But late last year, the IRS came down hard on Harborside Health Center in California, one of the largest and most successful dispensaries in the country. The IRS ruled that Harborside cannot claim standard business tax deductions because cannabis is an illegal drug. As a result, the IRS told Harborside that it owes several million dollars in additional taxes for years in which it claimed those deductions.
The Regulate Marijuana Like Wine (RMLW) initiative, however, includes five measures that could help dispensaries fight back against the IRS.
Under the proposed law:
#1. California would remove cannabis from its list of controlled substances. Dispensaries could therefore “argue in federal court that since cannabis is no longer a controlled substance in your home state, the court must conclude that there is reasonable doubt regarding the accuracy of the listing cannabis on the federal schedule.”
#2. The state would notify the feds that Californians want to remove marijuana from the federal controlled substances list. It’s an important part of the measure, as “the People of California have supremacy over a federal agency, on issues of health and safety, even if it is the DEA,” according to RMLW organizers.
#3. California would have to defend the initiative at the local, state and federal levels, providing defense attorneys with ample resources and a sizable budget.
#4. State employees would be prohibited from cooperating with federal authorities in cases involving individuals or dispensaries that are in full compliance with state marijuana laws.
#5. Individuals would be granted civil rights to possess, use, cultivate and sell marijuana – which organizers say would thwart the IRS.
Organizers behind RMLW are trying to get as much support for the move as possible, so it’s not surprising that they would try to get dispensaries on board by highlighting how it could help them.
The campaign got off to a fast start last fall, with organizers collecting more than 10,000 signatures in the first two weeks. The total stood at about 20,000 earlier this month. The goal is to get enough valid signatures to qualify the initiative for the fall ballot.
In an unusual legal settlement, a Colorado company has issued a video statement about its [click to continue...]
Washington State’s MMJ program will officially be rolled into its recreational market after Gov. Jay [click to continue...]
The two companies selected to grow and dispense medical cannabis in Minnesota have raised a [click to continue...]
Medical marijuana businesses in Vancouver, British Columbia, may soon be in the city’s crosshairs. The [click to continue...]
An increasing number of states are requiring cannabis companies to track every plant from seed [click to continue...]
The agency in charge of overseeing Oregon’s recreational marijuana industry is planning to add a [click to continue...]
Cannabis business owners harassed by federal prosecutors despite operating legally in their respective states would [click to continue...]
An attempt to legalize medical marijuana in Florida this year via the state Legislature is [click to continue...]
An Ohio organization pushing for medical marijuana legalization in the state says a stronger, more [click to continue...]
A dispensary run by the president of the California Cannabis Industry Association has come under [click to continue...]
Oregon officials in charge of regulating the state’s up-and-coming recreational marijuana industry expect roughly 2,000 [click to continue...]
One of the first commercial cannabis testing labs in the United States is seeking $5 [click to continue...]
The head of the Drug Enforcement Agency will resign next month, prompting cheers from cannabis [click to continue...]
The owners of a planned Las Vegas dispensary held a ceremonial groundbreaking on Monday despite [click to continue...]