Corporate Cannabis? Legal Marijuana Goes Legit
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Corporate Cannabis? Legal Marijuana Goes Legit
Posted by CN Staff on May 27, 2014 at 08:14:08 PT
By Robert W. Wood, Contributor
Source: Forbes
USA -- Americans could learn from Canada, as the New York Times explains in When Cannabis Goes Corporate. Canada’s free-for-all approach prompted complaints from police and local governments, so Canada adopted a regulated system for growth and sales. Enter Tweed Marijuana, one of the companies licensed to grow medical marijuana in Canada.The new rules allow prescription holders to buy from approved, large-scale, producers. More informal growing operations suffer. But the changes have spawned an industry of more legitimate producers with bigger business models. And that should mean more sales.
Canada expects to collect taxes on over 3.1 billion in annual sales. The figures stateside could be vastly better. In Washington State, where even recreational marijuana is now legal, the Liquor Control Board hired Prof. Mark Kleiman of UCLA to research the state’s marijuana market. He estimated Washington’s medical and illicit consumption generated approximately $1.2 billion in sales annually.Colorado too voted to legalize marijuana even for recreational use. Already, Colorado gets $2 million from marijuana taxes. And while there are rules in Colorado and Washington, both states seem well on their way to regulating and profiting from the industry. Medical use is far more prevalent, now numbering 20 legal medical marijuana states and D.C.Yet in the Feds’ view, regardless of state legality, marijuana is a controlled substance and illegal under federal law. As more states have clashed with federal law, this mismatch has become more contentious. The Department of Justice issued a response suggesting that it will lay off the raids and prosecutions.But the feds will lay off only if the states create “a tightly regulated market” with rules that address federal “enforcement priorities” such as preventing interstate smuggling, diversion to minors, and “adverse public health consequences.” Those phrases seem imbued with discretion. This memo to U.S. attorneys makes clear that the DOJ can still prosecute growers and sellers.To be sure, this is much bigger than a tax problem. And yet the tax problems of the industry are huge and are thought to be one of the industry’s major impediments. Section 280E of the tax code denies even legal dispensaries tax deductions. The main culprit is Congress, not the IRS. The IRS has said it has no choice but to enforce the tax code passed by Congress.How big is the industry’s problem? “The federal tax situation is the biggest threat to businesses and could push the entire industry underground,” the leading trade publication for the marijuana industry reported. One answer has been for dispensaries to deduct expenses from other businesses distinct from dispensing marijuana. If a dispensary sells marijuana and is in the separate business of care-giving, the care-giving expenses are deductible. If only 10% of the premises are used to dispense marijuana, most of the rent is deductible.Another idea is for marijuana sellers to operate as nonprofit social welfare organizations. That way Section 280E shouldn’t apply. The industry needs to operate more like other businesses. Sometimes such matters involve structural questions. To avoid trouble with the IRS, some claim that dispensaries should be organized as cooperatives or collectives.The Marijuana Tax Equity Act would end the federal prohibition on marijuana and allow it to be taxed. The bill would also impose an excise tax on cannabis sales and an annual occupational tax on workers in the growing field of legal marijuana.You can reach me at:  Wood This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.NYT: When Cannabis Goes Corporate: Forbes Magazine (US)Author: Robert W. Wood, ContributorPublished: May 27, 2014Copyright: 2014 Forbes Inc.Contact: readers forbes.comWebsite: Medical Marijuana Archives 
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Comment #3 posted by MikeEEEEE on May 28, 2014 at 15:37:53 PT
schmeff, let us not forget the children
The toxins in food affect the children the most, because they are still in development stages. Many of them are being seen with autism and other problems.Politian's use the children all the time for their propaganda, but it's about time they actually started to care about them.
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Comment #2 posted by schmeff on May 28, 2014 at 10:09:55 PT
Cannabis Kills
Or it will if it becomes a corporate commodity.Corporate cannabis will become like corporate food: toxic. Why do you suppose there is such an explosion of diabetes, obesity, gluten sensitivities, immune disorders and food allergies? Twenty years ago I'd never even heard of gluten intolerance. Do you think it might have something to do with the GMOs, the fertilizers, the growth hormones, the pesticides, the antibiotics and other undisclosed poisons that the thirst for corporate greed and profits have injected into our food?If you are a friend of cannabis, one of your strongest mantras has always been, "Nobody ever died from cannabis." That will become a nostalgic truism of yesteryear if greed and the thirst for profits turns cannabis into a corporate commodity.
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Comment #1 posted by runruff on May 27, 2014 at 10:01:21 PT
Ya'll come now!
Let My People Grow is now a blog site and a Facebook community. Come share, it is for the cause. 'cause we love freedomcheers!
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