Who Shares In Marijuana Taxes? The Surprising Answer

12/24/2014

Robert W. WoodContributor

Taxes on marijuana are big, and it’s easy to see why. A discussion about legalizing marijuana often segues into one about tax revenues. Marijuana for medical use is legal in 23 states and the District of Columbia. Recreational marijuana is legal in DC and in four states, Colorado, Washington, Oregon and Alaska. More states will be coming.

In the meantime, cannabis—even for medical use—remains illegal under federal law. That leads to numerous legal woes for operations that are legal under state law. One sweet spot among legislators is tax revenue. It is a boon for the states. It could be a boon for the feds too.

The proposed Marijuana Tax Equity Act (H.R. 501), if passed, would end the federal prohibition on marijuana and allow it to be taxed. Growers, sellers and users would not to fear violating federal law. But dealing with taxes would be another story.The bill would impose an excise tax of 50% on cannabis sales and an annual occupational tax on workers in the field of legal marijuana.

Even if passed, one wonders if such high taxes could be collected. In the meantime, Colorado has trumpeted its tax revenues, though perhaps prematurely. It turned out that the $33.5 million Colorado projected to collect in the first six months of 2014 was too optimistic. When the smoke cleared, Colorado was missing $21.5 million in pot taxes! Yet the math isn’t difficult.

Marijuana tax revenues hit $3.5 million in January

There’s a 2.9% sales tax and a 10% marijuana sales tax. Plus, there is a 15% excise tax on the average market rate of retail marijuana. If you add them up, it’s 27.9%. But much of the volume goes to black market buys where sales taxes aren’t paid. But that could change.

In fact, Colorado is making some marijuana businesses happy with its rebate program. Sales tax applies to marijuana sales and vendors are required to collect and remit the tax to the state. However, Colorado rewards all businesses with a rebate for the prompt payment of taxes, letting businesses keep a percentage each month. Calling it a ‘vendor fee,’ Colorado allows businesses to keep 3.3 percent of the 2.9 percent state sales tax.

According to estimates by the Denver Post, Colorado’s medical and recreational marijuana stores have collected—and kept—over $447,000 in sales taxes in the 10 months ended October 31, 2013. That could mean more than 400 marijuana stores in the state will end up clearing approximately $575,000 for all their trouble. It is what has allowed pot shops to keep more than $500K in sales tax.

That’s not bad, and at least it is something for their trouble. The idea that retailers should get a little sweetener for collecting sales tax is nothing new. But in the marijuana context, it can be especially attractive precisely because it would otherwise be hard to collect.
Already, with typically higher taxes for recreational than medical use, there is a clear incentive to resort to the illegal market. The Marijuana Policy Group suggested that only 60% of purchases in Colorado may be made through legal channels. One reason is price, another is taxes.

And the taxes are still being contested. The Colorado tax on marijuana has been upheld despite claims that paying it amounts to self-incrimination violating the Fifth Amendment. The plaintiffs wanted the recreational pot taxes outlawed, reasoning that they require businesses and consumers to implicate themselves in federal crimes. The plaintiffs lost on getting an injunction, but challenges to the taxes are continuing. On the other hand, under a state refund program, Colorado residents may get a “marijuana tax” refund.

The 2.9% medical marijuana tax compared with 27% on the recreational variety is a big spread. Some patients could be reselling their 2.9% medical stock to the public. But the sales tax rebate may be one of the few places marijuana businesses feel fairly treated. After all, under federal law, marijuana is still illegal, classified as a controlled substance, even for medical use.

Thus, even legal medical marijuana businesses have federal income tax problems. Section 280E of the tax code denies even legal dispensaries tax deductions, and the IRS says it must enforce the tax code. Dispensaries can 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. Some marijuana sellers operate as nonprofit social welfare organizations, as cooperatives or collectives.
This isn’t the only context raising the conflicting federal and state laws over marijuana. Yet as medical marijuana has gained widespread acceptance and even recreational marijuana is taking hold, the federal vs. state conflict grows deeper.

Forbes: Who Shares In Marijuana Taxes? The Surprising Answer

Congress Quietly Puff, Puff, Passes on the Feds’ Medical Marijuana Ban

The feds can no longer rain all over states where medical marijuana is legal, ending an era of raids on dispensaries and the patients who depend on their medicine.

Basically, a measure to end the federal government’s ban on medical MJ was included in a 1,603-page spending bill passed by Congress the weekend of December 13th. According to the new rules, which Obama will sign into law this week, the government can no longer use their funding to mess with marijuana pharmacies.

Unfortunately for the states where even recreational weed is legal, the new law won’t have an effect on nonmedical marijuana shops. Sorry, Colorado/Washington/Oregon/Alaska/Washington, D.C. Your time will come.

While Obama’s been proceeding this way for a while now, the new strategy wasn’t yet written into law. By making it official, the government’s making a permanent move away from old rules that many saw as oppressive.

Medical marijuana is currently legal in 32 states, although the DEA continues to classify it among the most dangerous narcotics, saying it has no medical use. However, cannabis has gained quite a reputation for treating kids with seizure disorders, helping cancer patients retain their appetites, and even decreasing suicide rates among young male smokers.

According to the ACLU, 52 percent of all drug arrests in 2010 had to do with marijuana — and black people are almost four times as likely as Caucasians to be arrested for pot. In other words, this new bill has the potential to save the United States a whole lot of money while ending a few seriously harmful policing practices along the way.

Could this be the beginning of the end for marijuana prohibition?


ryot.org: Congress Quietly Puff, Puff, Passes on the Feds’ Medical Marijuana Ban

LaPiantiamo! Forza ASCIA!

Obama osserva l' Italia

Il messaggio di Andrea Triscuoglio è vero. I primi detrattori nella battaglia Antiproibizionista, sono i fascisti antiproibizionisti. Sono come degli infiltrati, che sostengono la lotta contro la proibizione sulla cannabis, ma hanno "riserve morali" e "pregiudizi" che arrivano a minare le basi di una lotta che dovrebbe rendere uniti e garantire solidarità a chi si batte con te.

Evitare le liti sarebbe la più grande vittoria. Ma ecco che spuntano gli integralisti del
antiproibizionismo. E rifiutano una mano piuttosto che trovare punti di conversione. La macchina del fango esiste anche qui. Emerge così l' immagine di una lotta tra poveri e senza speranza che il movimento antiproibizionista possa incidere realmente in un cambio nella politica.

Per fortuna esistono realtà come LaPiantiamo e ASCIA, le uniche due organizzazioni che sono riuscite a mettere un piede nella porta del legislatore. ASCIA, LaPiantiamo! E' un bellissimo gioco di parole che unisce due associazioni in un messaggio forte e chiaro. "seppelliamo l' ascia di guerra del proibizionismo, insomma: Piantiamola!"

Trisciuoglio dopo la visita in Parlamento: “Abbiamo strappato la promessa di un tavolo di discussione nazionale

“Avevamo promesso di far sentire in nostro fiato sul collo alle istituzioni, ed è quello che abbiamo fatto”. Andrea Trisciuoglio (nella foto davanti al Parlamento insieme al gruppo che l’ha accompagnato) riassume così la visita fatta come portavoce di LapianTiamo in Parlamento ai senatori Ciampolillo e Airola del Movimento 5 Stelle.

“Ho anche approfittato della presenza dell’imitatore di Grillo (inviato di Striscia la Notizia), per far in modo che la nostra visita abbia maggior visibilità e il messaggio possa arrivare anche al ministro della Salute Lorenzin, perché noi non ci fermiamo“.

Durante l’incontro al quale è stato accompagnato tra gli altri da Giancarlo Cecconi di ASCIA, Trisciuoglio ha raccontato ai senatori il percorso tracciato dall’associazione fondata da e per i malati, partito dalla fondazione del primo Cannabis Social Club, per arrivare all’approvazione all’unanimità della legge regionale pugliese sulla cannabis terapeutica in cui sarebbe stato autorizzato anche il progetto pilota di coltivazione avanzato dall’associazione.

“Ci hanno detto che avvieranno un tavolo di discussione per fare in modo che leggi come quella pugliese possano essere applicate a livello nazionale“, ha spiegato Trisciuoglio a Cannabisterapeutica.info raccontando come sia rimasto deluso del fatto che le opposizioni al progetto siano arrivate proprio dall’interno del movimento antiproibizionista italiano. Quando il progetto era stato presentato da LapianTiamo, spiegando che sarebbe stata costituita una srl per la produzione di cannabis terapeutica che secondo l’idea iniziale sarebbe stata possibile vendere ad 1,55 euro al grammo, qualche voce si era alzata additando l’iniziativa come la creazione di un monopolio sulla cannabis terapeutica.

Nel frattempo a livello nazionale è stata autorizzata la produzione allo stabilimento militare di Firenze, ma le polemiche non si sono placate. “Ma quale monopolio e monopolio – risponde Andrea interrogato su questo punto – come si fa ad accusarci di voler creare un monopolio? Noi che ci battiamo per i diritti dei malati come noi? Io, a maggior ragione da quando sono malato, sognerei un monopolio per la cannabis terapeutica che permettesse di venderla a quel prezzo. Il problema è che proponendola a quel prezzo si vanno a toccare molti nervi scoperti, in Italia così come dal punto di vista internazionale. Quello che mi ha molto deluso è che i maggior detrattori del nostro progetto siano stati alcuni antiproibizionisti italiani. Siamo stati vittima di un “fuoco amico”, ma noi andiamo avanti”.

Redazione Cannabisterapeutica.info

Federal reports target Colo. marijuana money

The federal government is stockpiling hundreds of "suspicious activity reports" that could provide federal agents with sufficient evidence to shut down any state-legalized marijuana business. While it may appear that federal authorities have taken a wait-and-see approach to marijuana legalization in the 23 states that now allow medical or recreational use, these reports are poised like a blade over the budding industry should federal laws be enforced. This risk of federal prosecution has led some cannabis companies to literally launder their money. "You used to be able to just smell it," said Jennifer Waller, vice president of the Colorado Bankers Association, speaking of the cash from marijuana shops. "But now they are using Febreze a lot, putting the money in dryers, a lot of different things to try to disguise the scent because marijuana has such a distinct odor." That distinct odor is considered a red flag by federal authorities who require banks to file a suspicious activity report for every transaction that might be associated with illegal activity, including selling marijuana, even for state licensed businesses. "It's because of the illegal nature of it," Waller said. "In banking, if you are accepting the funds from a marijuana company and you are aware of it … you can be charged with money laundering yourself." Banks fear the repercussions of holding deposits related to marijuana, still a Schedule I illegal drug under federal law. That could mean prison time for tellers, fines for the bank, and even the bank losing its federal deposit insurance. If a marijuana store is charged with money laundering, it could lose everything. "Even before a conviction, the feds could freeze your assets," said Chris Myklebust, commissioner of the Colorado Division of Financial Services. "And if there is a money laundering conviction, the feds can seize the assets, too." The federal government has already collected more than 1,100 reports that implicate different cannabis companies in financial crimes nationwide. "Just in a moment's notice, the U.S. Justice Department could literally take down every single dispensary in Colorado, probably within about a day." said Rob Corry, a Denver attorney and marijuana advocate. Corry has worked on several cases where federal agents have seized assets — cars, cash, bank accounts — though many of the records are sealed and it's hard to gauge just how often this occurs. More often, banks simply shut down marijuana-related accounts. Between February and August 2014, banks filed more than 475 "Marijuana Termination" suspicious activity reports — indicating they closed hundreds of accounts because of possible criminal activity. "I've lost my personal bank account, my brothers have lost their personal bank accounts," said Sally Vander Veer, operator of Medicine Man dispensary in Denver. The dispensary also lost its account in August. She says that without a bank account, all Medicine Man employees are paid in cash. "I can't protect them. They walk out of here with a pocket full of cash and, in essence, they become another target and a potential victim of not having banking in the marijuana industry," Vander Veer said. The dilemma has resulted in marijuana dispensaries hiring private businesses like Blue Line Protection Group that employ former military or law-enforcement officers equipped with handguns, bulletproof vests, tactical training and armored trucks to transport cash and product to undisclosed locations for safekeeping. "When we started, the clients we were picking up had a manager taking (cash) in a Honda Civic or some kind of Subaru, unarmed, no vests, no tactics, no skills," said Dominic Powelson, who works for Blue Line Protection Group. State regulators in Colorado and Washington have also tried to ease access to banking. Mycklebust, the Colorado financial services commissioner, issued a charter to the first ever marijuana-focused credit union in November. The new credit union will not immediately have federal credit insurance, although it has applied. Mycklebust said the new credit union must also file suspicious activity reports. The so called "SARs" stem from guidelines set forth by the Financial Crimes Enforcement Network, a branch of the U.S. Treasury Department. The guidelines were meant to ease access to banks. "Banks are required by law to report when they think that a business is making money from something illegal, and marijuana is still federally illegal," said Steve Hudak, spokesman for FinCEN. "We attempted to provide guidance that would help to get cash off the streets and some of the public danger that is associated with that, so we went about as far as we could." But the guidelines didn't actually legalize banking for marijuana businesses — only Congress can do that. So far, Congressional leaders have been opposed. "(FinCEN's) guidance is dangerously misleading," wrote U.S. Sens. Chuck Grassley, R-Iowa, and Dianne Feinstein, D-Calif., in a letter of reprimand to the agency. "Indeed, following the guidance may expose financial institutions to civil or criminal liability." Still, some U.S. representatives from Colorado and other states have introduced legislation to federally legalize state-approved marijuana, or at least legalize the industry's access to banking. But those bills have not advanced, and state-approved marijuana businesses operate solely as a matter of federal discretion. That could change at any time. Federal reports target Colo. marijuana money

Marijuana Plant Legalization News: President Obama in Favor of Legalizing Recreational Use in DC

Despite his support for a voter referendum to legalize the recreational use of marijuana in Washington, D.C., President Barack Obama is set to sign a last-minute spending measure that would block the results of that vote.
On Nov. 4, voters in D.C. passed legislation that would permit adults over 21 years old to possess up to two ounces of marijuana for personal use and grow up to six cannabis plants within their home. People would also be allowed to transfer up to one ounce of marijuana to another person, although they would be restricted from actually selling it. D.C. voters approved the referendum by a nearly 2-to-1 margin.
According to White House spokesman Josh Earnest, the Obama administration is in support of the referendum legalizing marijuana use, however he will reluctantly sign a government funding bill that includes a provision blocking the measure. The provision, which was injected into the $1.1 trillion spending deal by Republicans in Congress, will prohibit the district from spending money to implement the new policy.

"This administration has been a strong supporter of the District of Columbia getting statehood. We do not believe that Congress should spend a lot of time interfering with the ability of the citizens of the District of Columbia to make decisions related to how they should govern their community," Earnest said, according to ABC News.
Nevertheless, "the president supports the passage of this compromise proposal and would sign it if it arrives on his desk," he added.
The $1.1 trillion spending plan was approved by the House of Representatives during a late vote on Thursday. Now it must be passed by the Senate before it can be signed by the president, reports USA Today.
White House officials announced that Obama will sign the bill because it includes more good provisions than bad ones and can prevent another government shutdown.

Marijuana Plant Legalization News: President Obama in Favor of Legalizing Recreational Use in DC

‘Designer strains’ of cannabis could cure more ills

An Israeli crop developer aims at maximizing marijuana’s medical benefits while reducing its high

BY DAVID SHAMAH December 7, 2014, 5:39 pm

A patient purchases medicinal cannabis in Tel Aviv (photo credit: Abir Sultan/Flash90)

Two Israeli companies that have been working to improve medical marijuana have submitted applications for the approval of two new cannabis strains genetically bred to manage medical conditions more effectively than those current available.

Israel is one of about a dozen countries and US states that allow the use of marijuana for medical purposes, and one of the few where growing cannabis for use in medical treatment is legal. Under rules adopted last year, patients who want to use marijuana to relieve chronic pain or treat other conditions (such as psychosis) apply to one of 31 authorized doctors for a prescription, which is dispensed at authorized pharmacies.

There are eight licensed growers in Israel, one of which is a company called Seach Ltd. Seach has teamed up with an Israeli software developer called BreedIT, which has devised a technique to help breeders modify crops to emphasize specific traits. The new joint development project, formed in August, is called KanaboSeed.

The BreedIT system is based in part by research conducted by Professors Haim Rabinowitch and Nachum Kedar of Hebrew University, most famous for their work in developing popular strains of cherry tomatoes and perfecting long-life tomatoes that contain a ripening inhibitor gene to guarantee a longer shelf life.

The new technology, according to BreedIT CEO Dr. Oded Sagee, is essential to the development of the medical marijuana industry – which Sagee believes is set for a major worldwide expansion. “We decided to develop an organized breeding program to assist breeders to develop new breeds of cannabis,” Sagee said in an interview earlier this year. Currently, he said, the available strains are not optimized for medical use. “We believe that with our knowledge and background we will be able to develop new breeds that will be more effective,” he added.

Sagee, along with the other researchers working in the nascent medical marijuana business, is hoping to develop strains of cannabis that have improved CBD-to-THC ratios. THC, or tetrahydrocannabinol, is the chemical responsible for most of marijuana’s psychological effects, and is the component of cannabis that most interests casual users of cannabis; the more THC, the better the high. Those who use marijuana to relieve chronic pain also seek strains with higher levels of THC than CBD; those strains are more effective at masking pain.

CBD, or cannabidiol, has been shown in many studies to have important medical benefits, such as in the treatment of schizophrenia, depression, rheumatoid arthritis, colitis, liver inflammation, heart disease and diabetes. A good example of engineered cannabis is Avidekel, a strain developed by Israeli cannabis breeder Tikun Olam, which has a very high level of CBD and a very low level of THC. Sagee said that KanaboSeed is working with researchers to develop “designer strains” of cannabis that will contain components to treat specific medical issues, without the psychotropic effects of THC.

The applications submitted by KanaboSeed, said Sagee, “are just the first of what we anticipate will be a line of new potential cannabis varieties that KanaboSeed is developing to address specific medical uses. We intend to capitalize on the commercialization of new varieties, as allowed by the laws and regulations, in Israel and other countries where regulation permits the use of medical cannabis.”

The Agriculture Ministry and the Rural Development Plant Breeders’ Rights Council will review the applications. Hearings will be held about granting the license (no date has been set), with the public invited to give their opinions. The company will grow the new strains (on land belonging to Seach), which will be evaluated by the agencies, and once approved, the company will be granted a registration (the equivalent of a patent) for the strains.

Shay Avraham Sarid, KanaboSeed’s manager of Research and Development, said that the applications were “an important milestone for KanaboSeed. The BreedIT team contributes significant value to our development efforts, most notably the ability to streamline the breeding process. In addition to saving time, we are also developing new varieties more cost-effectively. Together we are building a product pipeline that will provide numerous opportunities for revenue growth going forward.”

Read more: 'Designer strains' of cannabis could cure more ills | The Times of Israel 

New developments in Europe's cannabis market

Top 10 Countries With The Highest Marijuana Consumption

By Priyankee Saikia,

Saturday, 06 Dec 2014


As Indians, we often do not understand what the big deal is with the entire 'legalize marijuana' movement anyway. Not like it is legal here, but since its enforcement is not really a priority for law-enforcers it is smoked by the kilo here. However, have you ever thought about which countries smoke the most pot? Does it include Jamaica, land of Bob Marley; the Netherlands with its Annual Cannabis Cup at Amsterdam - or maybe even India? Well, the 2014 World Drug Report released by the United Nations give you the answer!

1. Iceland

18.3 per cent of Iceland smoke weed - which is almost a fifth of the population! The possession, sale, transport and cultivation of cannabis are illegal in that European nation - and could result in jail time and heavy fines. It does not seem to deter them though!

2. Zambia

The next 'highest' place is the African nation of Zambia with 17.7 per cent usage. Even though it is illegal there as well, farmers are rapidly turning to marijuana cultivation over traditional crops - and legalizing the plant there has now become a political issue, with presidential candidates promising to make it lawful if voted to power!

3. United States

With the movement for legalizing pot snowballing in the United States, no wonder it has the third-highest consumption in the world with 14.8 per cent use. Medical marijuana is now legal in 23 states - while recreational use is also permitted by law in Colorado and Washington!

4. Italy

Coming close at the heels of the US is Italy with 14.6 per cent. While it is illegal to cultivate or sell marijuana there, possession of small quantities for medical use has been decriminalized. In fact, the country will now have its army cultivating cheap marijuana from next year to dissuade illegal street dealers from thriving!

5. New Zealand

With a similar percentage of the population smoking weed, New Zealand is next on the list. Anything to do with this herb is illegal there, even though there have been political efforts to legalize medical marijuana. It has not come to pass yet, although the supporters do not seem to be giving up anytime soon.

6. Nigeria

With 14.3 per cent of the population smoking marijuana, Nigeria has the second-highest percentage in Africa. They have a federal agency that makes sure there is no growing, processing, trafficking or consumption of the plant by destroying plantings and keeping a check at airports.

7. Canada

The next nation is Canada with 12.2 per cent use - where its sale is illegal. However, the cultivation, transportation and consumption for medicinal reasons are authorized by the government. As far as the people's votes are concerned, a whopping 59 per cent agree that it should be completely decriminalized.

8. Spain

Spain also counts among one of the highest consumers of the intoxicant - with 10.6 per cent use. Spain is now touted to be the 'new Amsterdam' - a destination for marijuana tourists from across the world. About 500 private 'cannabis clubs' exist in the country, with 200 of them in Barcelona alone!

9. Australia

Australia is next with 10.3 per cent of the country's population lighting the blunt annually. Even though the sale and transportation of the plant is illegal there, the laws have been relaxed for consumption in a number of the states - and it is also legal to have not more than two plants growing at your home.

10. Jamaica

It is a wonder that a country where the Rastafarian movement first arose still has bans on marijuana. It is the last on this list - with 9.86 per cent usage among the population. However, the winds of change are here and the country is all set to decriminalize possession and sale of the plant. Not that people were waiting for it to happen to start, anyway.

Note: This article is meant to be informative, and neither the website nor the author endorses the use of marijuana for recreational purposes.

All Photos: © Thinkstock Photos/Getty Images

MENSXP.COM

Andrea Trisciuoglio di LapianTiamo: “Vado in Parlamento per far ascoltare la voce dei malati”

Pubblichiamo qui di seguito un “ultimatum” di LapianTiamo, associazione di malati che lottano per avere il diritto di coltivare la cannabis terapeutica, scritto da Andrea Trisciuoglio (nella foto sotto) che racconta la sua futura visita in Parlamento ad alcuni Senatori che l’hanno invitato, come l’unico mezzo per far sentire “il fiato sul collo alle istituzioni”.

Dopo i numerosissimi contatti con le istituzioni parlamentari per richiedere autorizzazione ad avviare quel progetto pilota per la produzione di cannabis terapeutica che già legiferò la regione Puglia lo scorso 22 luglio;

Dopo le reiterate disobbedienze civili che ci vedevano piantare cannabis per la prima volta al mondo in quel palazzo che andrò a visitare.

E questo per dire che ne è trascorso di tempo dalla nascita LapianTiamo (29 gen. 2013) e da allora la lista delle persone che non ci son più aumenta a dismisura.

Questo per dirvi che i tempi di noi malati (non più in grado di aspettare) sono diversissimi da quelli della politica.

Ed è per questo che il nostro nome LAPIANTIAMO assume il significato “MO’ BASTA!!!”

SI’: basta ai troppi proibizionismi che ledono i diritti di noi malati. La succitata legge regionale pugliese riceveva approvazione all’unanimità: questo significa che nessuna forza politica si e’ mai permessa di ostacolare quanto veniva realizzato dai malati LapianTiamo. E’ ciò che chiederò alla politica.

Mercoledì 10 dicembre sarò al Senato della Repubblica per portare, come più volte affermato, il mio corpo malato al cuore della politica. E per questo sarò li per tentare di far sentire il mio fiato sul collo alle istituzioni che ancora non autorizzano quanto da lapiantiamo creato.

Spero di dare la massima visibilità a questo incontro che si farà al gruppo parlamentare del Movimento 5 Stelle con i senatori Ciampolillo e Airola che ci hanno spalancato le porte del parlamento per continuare ad affermare i nostri diritti. Oggi parlando con alcune realtà antiproibizioniste abbiamo condiviso l’urgenza di essere ancora una volta presenti nel Palazzo per far sentire ancora che ci siamo. Convinto che una voce singola (la mia) rischierebbe di non essere ascoltata, ma un coro di voci assordante verrá ascoltato pure dalle istituzioni più sorde.

Andrea Trisciuoglio

Cannabisterapeutica.info: Andrea Trisciuoglio di LapianTiamo: “Vado in Parlamento per far ascoltare la voce dei malati”