Payson Roundup: “Plans are under way to open a medical marijuana dispensary in Payson later this year. Desert Medical Campus, the only group with state authorization to open a licensed dispensary in Rim Country, has been in talks with town officials for some time to open a dispensary and cultivation site off North Tonto Street.”
Politico: “Now that voters in Colorado and Washington have legalized recreational marijuana use, dope smokers there can light up without the usual paranoid fear that the cops are at the door. The taxman is another matter. Cash-starved legislators are seeing dollar signs in dime bags — with talk that a tax on marijuana could pump hundreds of millions or even billions into budgets still reeling from the recession.”
Denver Post: “State regulators charged with watching over Colorado’s medical marijuana industry have fallen short on everything from tracking inventory and managing their budget to keeping potential bad actors out of the business, a state audit released Tuesday found. Often lauded as a national model, Colorado’s so-called seed-to-sale system of regulating medical marijuana does not exist auditors found. . . . The audit also found:”
Seattle Pi: “‘No. No more than they could stop the end of slavery, no more than you could stop women getting the vote, no more than you can stop the end of Jim Crow segregation,’ said Harry Levine, a university professor with decades of research into the war on drugs and specifically the enforcement of marijuana prohibition. ‘This is a thing that runs counter to the fundamental functioning of a modern society. It’s immensely wasteful, it’s punitive, it’s excessive and it doesn’t make any sense,’ added Levine, a sociologist at City University of New York. While we were waiting for U.S. Attorney General Eric Holder to announce what the federal stance toward legal marijuana in Washington and Colorado will be, we’ve been checking in with various experts in marijuana and the enforcement of laws against pot.”
Jamestown Center, a medical marijuana dispensary licensed by the Arizona Department of Health Services, opened for business in Eloy, Arizona, on March 28, 2013. It is managed and operated by pharmacists and a bio-chemist.
Judicial Watch: “Judicial Watch, the organization that investigates and fights government corruption, announced today [March 25, 2013] that it filed an amicus curiae brief (White Mountain Health Center v. County of Maricopa (1 CA-CV 12-0831)) on March 19, 2013, in the Court of Appeals of the State of Arizona, District One, in support of Maricopa County and the State of Arizona’s lawsuit appealing a December, 4, 2012, Maricopa Superior Court ruling that the Arizona Medical Marijuana Act (AMMA) did not conflict with federal drug laws. . . . ‘Federal law is unambiguous in that marijuana is a controlled substance regulated under a comprehensive statutory and regulatory scheme. As such, the production, sale, and use of marijuana, other than as part of a federally authorized research program, is a violation of federal law regardless of any state law permitting such activities even in a limited manner’.”
Las Vegas Sun: “Five state senators and one member of the Assembly flew to Phoenix to tour a medical marijuana dispensary and a grow house before meeting with Arizona legislators to talk about the state’s new system for getting the drug to patients.”
Phoenix New Times: “The state-regulated medical-marijuana dispensary industry that Arizona voters approved in late 2010 is becoming a reality, with three new retail shops opening this week. . . . Those four shops add to the seven already open across the state, records show. Meanwhile, 11 others are in various stages of final approval for operating certificates by the Arizona Department of Health Services, which oversees the program.
Times-Herald: “Year-old criminal charges were dismissed Thursday against Matt Shotwell, a one-time operator of one of Vallejo’s largest medical marijuana dispensaries. Since February 2012, when the Vallejo Police Department’s series of raids on medical marijuana dispensaries launched with Shotwell’s arrest at Greenwell Cooperative dispensary, no operators have been convicted.
OC Weekly: “Despite allowing the Kush Expo to operate annually since 2010, the city banned medical-marijuana dispensaries in 2007 and has extended the prohibition every year since. Last year, the city also called in the U.S. Drug Enforcement Administration (DEA) to help crack down on pot clubs. In August, the DEA sent threatening letters to dozens of landlords and filed three asset-forfeiture lawsuits, including one against the owner of a $1.5 million building on Ball Road.”
Arizona Daily Star: “The day after police raided the Get Legal Cannabis Certification Center, 6647 E. 22nd St., a crowd of about 20 angry customers gathered outside. . . . Thus ended the short life of the sort of business Arizona’s medical marijuana industry should avoid being associated with if it wants to be taken seriously. . . . The last police visit was on Feb. 28, when Counter Narcotics Alliance officers served a search warrant, looking for evidence not of drug crimes but of fraud.”
Payson Roundup: “A grand jury indicted Nature’s Harvest founder and director Sheelah Golliglee last month for running a criminal syndicate and selling marijuana. . . . [The Navajo County Sheriff’s Department] said Nature’s Harvest was charging patients for medical marijuana, but passing it off as a consultation fee. . . . A doctor who worked at the facility was also indicted for forgery and fraudulent schemes, but has not appeared for his arraignment, said [Navajo County deputy attorney Jason] Twede.”
CBS5AZ.com: “A group [The Regulated Dispensaries of Arizona Association] representing licensed medical marijuana dispensaries in Arizona is asking police and sheriff’s authorities statewide to crack down on unlicensed and illegal medical marijuana clubs.”
A search of the Arizona Corporation Commission’s website for “The Regulated Dispensaries of Arizona Association” and “Regulated Dispensaries of Arizona Association” did not find an entity in Arizona with that name. Does anybody know anything about this so called association?
Azcentral.com: “The half-empty shopping strip at 24 W. Camelback Road looks like so many others in the city . . . . But . . . one of the spaces in this shopping center could soon house Urban Greenhouse Dispensary, central Phoenix’s first and only medical-marijuana dispensary. Unlike many other prospective Valley dispensary owners, who seemingly have tried to stay under the radar, the principals behind Urban Greenhouse have taken a pre-emptively open approach.”
Arizona Republic: “Sen. Kimberly Yee has become the go-to legislator for bills involving Arizona’s medical-marijuana law. The Phoenix Republican is the primary sponsor of three measures this session that would tighten what members in the law-enforcement community have identified as loopholes in the 2010 voter-mandated law as well as pave the way for university researchers to study the effects of medical marijuana. . . . We recently spoke with Yee about her work involving the medical-marijuana act. Here’s an edited excerpt:
Longview Daily News: “Longview police busted a Kelso medical marijuana dispensary last week and arrested four people for allegedly selling pot on the side to non-patients. Agents from the Longview Police Street Crimes Unit served a search warrant Thursday at the ‘Grass Rootz’ dispensary”
ABC 10 News: “They dispense snacks and movies, but vending machines in San Diego may soon be kicking out a different product — marijuana. Those medical marijuana dispensaries shut down during a crackdown in 2011 could soon reappear in San Diego, along with some high-tech help. ‘It’s armor-coated. Second, it’s 800 pounds,’ said Bruce Bedrick, CEO of Medbox.”
Associated Press: “A United Nations-based drug agency urged the United States government on Tuesday to challenge the legalization of marijuana for recreational use in Colorado and Washington, saying the state laws violate international drug treaties.”
Cronkite News: “For Sen. Kimberly Yee, R-Phoenix, some edible medical marijuana products are too easy to mistake for candy and should be labeled clearly by law. Along with a group of rural lawmakers, Yee also says counties need more leeway under state law to regulate where medical marijuana may be cultivated. Those are among several bills this legislative session addressing how the medical marijuana system Arizona voters approved in 2010 should work.”
Associated Press: “Eight former Drug Enforcement Administration chiefs say the federal government needs to act now or it might lose the chance to nullify Colorado and Washington’s laws legalizing recreational marijuana use. The onetime DEA heads are issuing joint statements Tuesday saying the Obama administration has reacted too slowly and should immediately sue to force the states to rescind the legislation.”
American University Washington College of Law Professor Benjamin Leff thinks there is a way that medical marijuana dispensaries in states that have legalized medical marijuana can avoid the application of Internal Revenue Code Section 2080E that causes taxpayers to pay extraordinarily high federal income taxes. Professor Leff wrote an article in Slate called “How legal marijuana sellers can beat a draconian tax” in which he states:
“‘The federal tax situation is the biggest threat to businesses and could push the entire industry underground,’ . . . . sellers of controlled substances—in other words, drugs, including marijuana—are not permitted to deduct any ordinary business expenses other than the cost of the goods they are selling. That’s because of section 280E of the federal tax code . . . . I teach tax law, and I have a solution: Marijuana sellers should operate as nonprofit ‘social welfare organizations’.”
I am not a professor of tax law, but I do hold a masters in law degree (LL.M.) in income tax from New York University School of Law and have studied and written about Code Section 280E. My opinion is that the IRS and the federal courts are not going to allow taxpayers to violate federal criminal law (growing, possessing and selling marijuana) and avoid paying federal income taxes or the application of Code Section 280E.
azfamily.com: “Mohave County authorities arrested two people after busting a marijuana grow operation in Golden Valley . . . . more than 500 marijuana plants were seized”
Mohave Valley Daily News: “The Mohave Area General Narcotics Enforcement Team, with the assistance of the Bullhead City Police Department, arrested a Bullhead City resident and his wife after a search warrant was served on their home following an investigation regarding a prior marijuana bust last week. According to Emily Fromelt, spokeswoman for the Bullhead City Police Department, a recent investigation into an illegal marijuana business that led to two arrests also led to the discovery of additional grow operations that contained more than 400 marijuana plants. On Feb. 27, the MAGNET team served a search warrant into the residence of Edwin Harry Rapp III, 39, in the 800 block of Campbell Road, where police seized approximately 175 marijuana plants.
CNN Money: “entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%. The hefty levy is the result of a 1982 provision to the tax code, known as 280E, . . . . the rule bars those selling illegal substances from deducting related expenses on their federal income taxes. . . . Jim Marty, an accountant in Colorado specializing in medicinal marijuana tax law, said he has one client that didn’t turn a profit in 2009, 2010 or 2011. In 2012, though, she was handed a $300,000 tax bill from the IRS for those three proceeding years.”
For more on Section 280E read:
- IRS tells California Medical Marijuana Dispensary it Owes Millions in Unpaid Taxes
- IRS Claims Harborside Health Center Owes $2.5 Million in Back Taxes on Sales of $22 Million
- Feds’ Pot Response Differs in California, Colorado
- People Experienced with Internal Revenue Code Section 280E
- California wants Marijuana Shops to Pay Back Taxes
Annarbor.com: “It is illegal to sell medical marijuana through private shops, the Michigan Supreme Court ruled Friday in a decision one lawyer called ‘the end of the road’ for the hotly debated issue. In a 4-1 decision, the state’s highest court affirmed an Appeals Court finding that Michigan’s 2008 medical marijuana law does not allow people to sell pot to each other, even if they’re among the tens of thousands who have state-issued marijuana cards.”
NBC 7 San Diego: “FBI agents in San Diego are shifting focus from closing down medical marijuana dispensaries to cracking down on marijuana delivery services. NBC 7’s Tony Shin has this exclusive report.”
azfamily.com: “Vince Borinski says he generally smokes about one joint every day. . . . He is a medical marijuana card holder, and is legally authorized to use and cultivate medical marijuana in the state of Arizona. . . . Borinski was smoking and growing marijuana in his apartment at the Country Park Villas from April 2011 to October 2011, when he was evicted.”
Associated Press: “Pot smokers in Colorado were the biggest winners in the vote that legalized the drug. Now state regulators are working out the details of exactly how to tax it, so the benefits are shared statewide in the form of increased revenue.”
International Business Times: “On Tuesday [February 19, 2013], U.S. Chief Magistrate Judge Maria-Elena James dismissed a lawsuit filed by the City of Oakland against Attorney General Eric Holder and U.S. Attorney Melinda Haag that sought to halt the federal government’s closure of the shop. Haag had said in July that the store, which was featured on the Discovery Channel television series ‘Weed Wars,’ has become too large, making it a candidate for the Obama administration’s marijuana dispensary crackdown that began 2010. ‘We are, of course, disappointed in today’s ruling,’ Harborside executive director Steve DeAngelo said in a statement.”
azcentral.com: “A professional group promoting medical marijuana protested at the state Capitol on Thursday, calling on lawmakers to get educated on the facts about the medicinal value of cannabis before they decide whether to send the entire issue back to voters. The Arizona Wellness Chamber of Commerce, which includes physicians, accused some legislators of making “false and misleading” claims about medical cannabis as they attempt to pass a bill aimed at overturning the Arizona Medical Marijuana Act.”