February 27, 2012

Weekly Wrapup: MMJ Group to Take on IRS + Judges Handing Down Sentences Tied to Cannabis Raids

Medical marijuana news, cannabis dispensary updates and developments about pot growers

New industries often struggle to create a sense of unity among business owners and employees. It can take years for professionals to come together as a group to support common interests, vocalize shared concerns and lobby for legislative changes that benefit the industry as a whole.

The same is certainly true in the medical cannabis industry, which is highly fractured and largely unorganized. Many MMJ dispensaries and cannabis companies operate in a bubble.

Owners often focus solely on their own businesses, devoting little if any time or resources to industry events, networking
opportunities and medical cannabis groups. At the same time, MMJ organizations are still struggling to figure out the best
ways to be effective.

That’s finally beginning to change.

Earlier this month, MMJ Business Daily highlighted efforts by Americans for Safe Access to foster industry unity. Now, a new group has formed to tackle the important issue of business taxes.

InvestorWide Weekly Wrapup: MMJ Group to Take on IRS + Judges Handing Down Sentences Tied to Cannabis Raids

As we reported last week, several industry leaders have come together under the banner of the 280E Reform Team. The organization is tasked with educating the public, lawmakers and industry professionals about the Internal Revenue Service’s stance that MMJ businesses can’t deduct common expenses from their federal taxes.

That policy, articulated in an IRS audit of Harborside Health Center in Oakland, could sink many dispensaries, as they will end up having to funnel a much higher percentage of revenue to the government than businesses in other industries.

The reform group held its first workshop on Saturday in California, and it will spearhead others in key MMJ states in upcoming months (including Seattle on March 10). Its overarching goal is to bring about legislative change to let cannabis dispensaries and marijuana cultivation companies deduct payroll, rent and other business expenses from their taxes.

Also last week, MMJ Business Daily reported on some of the sentences handed down to Montana dispensary owners and employees caught up in the recent federal raids. As a whole, the sentences have been on the more lenient end of the spectrum, at least when considering the maximum penalties for drug charges. Individuals have received months – rather than years – of jail time and modest fines.

But it’s all in the eye of the beholder. Some of these MMJ workers thought they were operating well within state laws,
so jail time, fines and the loss of a job (or an entire business) are rather devastating.

These, however, are the risks one takes when operating in an industry focused on a substance that is still illegal
federally.  Stay tuned this spring to see what happens to the other professionals charged with crimes as a result of the
estimated 200 raids that have taken place in recent times.

Other top stories in MMJ Business Daily last week:

Michigan Lawmakers Weigh Changes to Cannabis Laws
Colorado Patient Registry Numbers Climb
Seattle Mayor Pushes Cannabis Legalization

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