U.S. treasury and law enforcement agencies will soon issue regulations opening banking services to state-sanctioned marijuana businesses even though cannabis remains classified an illegal narcotic under federal law, Attorney General Eric Holder said on Thursday.
Holder said the new rules would address problems faced by newly licensed recreational pot retailers in Colorado, and medical marijuana dispensaries in other states, in operating on a cash-only basis, without access to banking services or credit.
Proprietors of state-licensed marijuana distributors in Colorado and elsewhere have complained of having to purchase inventory, pay employees and conduct sales entirely in cash, requiring elaborate and expensive security measures and putting them at a high risk of robbery.
It also makes accounting for state sales tax-collection purposes difficult.
“You don’t want just huge amounts of cash in these places,” Holder told the audience at the University of Virginia. “They want to be able to use the banking system. And so we will be issuing some regulati. . . . . READ MORE
Taxing what you can’t measure is nonsense. But Colorado voters were poised Tuesday to do just that, by taxing wholesale marijuana sales at 15 percent — when no wholesaler exists. That’s right: Most Colorado adult-use marijuana sales must go directly from producer to consumer with no wholesaling allowed, and no wholesale price as a measure for the wholesale tax! That’s because Colorado law, at least at first, requires vertical integration of marijuana businesses.
Vertical integration? Here’s an example: A wine company owns land, vines and a winery, and sells to consumers only at its own outlet store. Substitute “marijuana grow area” for land and vines, “marijuana production facility” for winery and “marijuana retailer” for outlet store, and you understand the Colorado model. Colorado law will require that at least 70 percent of marijuana sales follow that model, with the supply chain integrated vertically (from top to bottom) — and with no wholesaler.
So how do you apply a wholesale level tax when no wholesaler exists? With great difficulty. Colorado regulatory authorities are struggling for answers.
Basing a tax on a fictitious . . . . . READ MORE
In front of the U.S. Capitol Thursday, two congressmen discussed H.R. 2240, the Small Business Tax Equity Act, a little known bill introduced in June by Oregon Democrat Earl Blumenauer to allow deductions and credits relating to expenditures for marijuana sales conducted in compliance with state law.
The bill, according to GovTrack.Us, has a 0% chance of being enacted and has a tiny chance of even getting out of the House Ways and Means committee. The main reason it has reached national attention is Grover Norquist, the President of Americans for Tax Reform, who has corralled 219 Representatives and 39 Senators to pledge to oppose any and all tax increases. He has taken up the no-tax-penalty-for-pot cause. Norquist—who has “No, absolutely not” ever smoked the stuff—believes that federal encroachment on the nascent field of state regulation of marijuana is a deeply serious topic, irrespective of the drug’s effects.
“There’s always a slight giggle factor on the issue dealing with marijuana,” said Norquist. “That said, this is tax policy, this is real stuff. This is important. This is everything from jobs to whether the federal government comes in and writes rules. . . . . READ MORE
Denver Auditor Dennis Gallagher disagrees with Mayor Michael Hancock’s recreational marijuana tax target, arguing the city should seek a starting tax rate of 3.5 percent instead of the mayor’s suggested 5 percent tax rate.
Gallagher warned Denver City Council members in a letter sent to Councilman Charlie Brown Monday, that the city’s 5 percent tax rate plan risks sending users back to the “dark shadows of the black market.”
“He wants the city to be very careful about not putting too much of a tax on it, because you (could) then defeat the purpose of what Amendment 64 was meant to do, which is not buying on the black market,” said Denis Berckefeldt, spokesman for the auditor.
The city expects it will have to spend about $9.4 million on education, enforcement and regulation of the pot industry, for which the tax would compensate.
The council will determine a starting tax rate and ceiling at its meeting Monday. The city will then pose those rates to voters in November. If approved, the council can raise the recreational marijuana tax rate to the determined ca. . . . . READ MORE
During a press conference on Wednesday, Democratic congressmen from Oregon, Colorado, Washington, and California announced that they will push for legislation to loosen the restrictions on state-legal marijuana businesses.
The five representatives sponsoring reforms hope to ease the burden for businesses in the cannabis industry by allowing them to file for federal tax deductions, open bank accounts, and operate without fear of property or forfeiture claims. They plan to introduce three bills — the Marijuana Businesses Access to Banking Act, the States’ Medical Marijuana Property Rights Protection Act, and an amendment to the IRS code relating to state-legal marijuana sales — and will seek to attach these measures to other legislation moving through Congress.
“These are relatively minor technical adjustments,” said Representative Earl Blumenauer of Oregon, “and in times past, things like this would find their way to be part of larger pieces of legislation.” The Hill reported that the sponsors believe the bills have “little chance at moving on their own,” but that they may make it to the president’s desk if they are included in, say, the broader farm bill bein. . . . . READ MORE
No, I don’t mean selling copies of the ( alleged ) Rob Ford video.
Nor do I suggest using magic mushrooms or LSD to transport Torontonians without them leaving their La-Z-Boy.
And I would refrain from selling whatever the Metrolinx brass are smoking? No way. Bad trip, man, as they used to say long ago in my youth. Bad, bad trip. Horrible visions of HST, HOV lanes, gas tax hikes, parking levies, development fees and red monsters with three heads, yellow eyes and pointy teeth.
But we do need to get off the couch and build transit.
Now, inhale deeply and think of this: Canadian Business magazine estimates Canucks spend at least $3 billion a year on cannabis alone. That’s a third of what we spend on our national substance, which flows like Niagara, beer.
A study by two B.C. universities found legal pot would churn out $2.5 billion in licence fees and taxes over five years in that province alone.
The GTA has way more people, but there’s a reason B.C. is called Lotusland, so let’s call it a wash and say our revenue streams would be similar.
You could lay a lot of transit. . . . . READ MORE
The proposal for a marijuana ballot measure came as the House started debate Friday evening on bills to regulate and tax pot. One bill would state how pot should be grown and sold, and the other would tax recreational marijuana more than 30 percent.
A draft bill floating around the Capitol late this week suggests that a new ballot question on pot taxes should repeal recreational pot in the state constitution if voters don’t approve 15 percent excise taxes on retail pot and a new 15 percent marijuana sales tax. Those would be in addition to regular state and local sales taxes.
Lawmakers have only a few days left to finish work deciding how to regulate the newly legal drug.
Marijuana activists immediately blasted the proposal as a backhanded effort to repeal the pot vote, in which 55 percent of Coloradans chose to flout federal drug law and declare pot legal in small amounts for adults over 21.
“It’s clear that the intent … is to prevent marijuana from being legal and being regulated and being controlle. . . . . READ MORE
The state House advanced a taxing measure Monday to levy a pot tax in excess of 25 percent, a reduction from the 30 percent rate lawmakers considered last week.
The proposal sparked a lively floor debate over the proper tax rate for a drug that’s never been taxed before. Democrats argued that voters want high pot taxes, and that consumers will gladly pay a premium for the assurances that would come from a regulated and legal drug supply.
“We need to responsibly tax it,” said the measure’s sponsor, Rep. Jonathan Singer, D-Longmont.
He predicted Colorado voters would happily sign off on marijuana taxes. Colorado law requires voters to approve new taxes.
Republicans argued against the taxes, tho. . . . . READ MORE