Federal Government Makes Another Move Against Medical Marijuana

First, we heard of a memo being issued in regards to the gun rights of prescription holders. All medical marijuana users, the memo stated, would no longer be allowed to purchase guns and ammunition; a right offered by the second amendment.

Next, we heard of banks in Colorado, which were being bullied into ceasing any future business with medical marijuana dispensaries. With the accusation of “conspiracy” and “distribution of illegal drugs” hanging over their heads, there are now no banks that will work with local collectives.

We see the government making a third move against medical marijuana now, as they trade in DEA agents for IRS agents. According to recent reports, caregivers in charge of a dispensary are no longer allowed to deduct basic costs from their taxable income, which will make it very difficult to conduct profitable business.

To put it another way, all businesses in the US are required to pay taxes on their net profits. Medical marijuana businesses will now have to pay taxes on all gross revenue, AND the taxes apply retroactively. This means that dispensaries that have been open for five years now suddenly owe five years worth of extra back taxes.

To put this into clearer terms, let's use the example of the Harborside Health Center, located in Oakland, CA. As the nation's largest legal source of medical marijuana, Harborside paid a half million dollars in federal taxes over 2007 and 2008, in addition to $1.1 million in city taxes and $2 million in state taxes. Now, four years later, the IRS is telling them they owe $2 million more!

Many people are asking, “How can they get away with this?” The answer is a random and obscure section of tax code that was implemented during Reagan's administration. In an effort to strengthen the war on drugs, section 280E was introduced, which prevents the deduction of expenses related to trafficking controlled substances.

Such ridiculous regulations are an obvious play by the federal government to get in the way of state-passed mandates, which they have previously stated they would not do. When will they accept that this is what people want, and that this is the direction our country is heading in? Let your local representatives know that federal aggression is not going unnoticed, and we're not happy about it!