The legal marijuana industry in the state has undergone some major changes in 2015.
Even though federal laws remain unchanged at tax time, dispensary owners, growers, drug manufacturers, and everyone else in places with a legal medical marijuana industry in the state should be aware of these changes at tax time.
By law, anyone who generates $ 1 worth of business income must file a tax return with the IRS. That’s when they come to subtract your business deductions. Marijuana entrepreneurs are no exception. If your state has repealed the medical ban, it is the politician’s job to change federal laws unfair to its residents and businesses.
A change in those federal laws would save American taxpayers more than $ 13 billion each year. Time has shown that marijuana is not a gateway drug, nor does it cause insanity, as movie producers once said to excite their viewers. And if smoking a drug is the problem, medical users where there are dispensaries have found that they can also vaporize, eat medication, drink juice or other beverages, use tinctures, pills, or sprays. Public use is declining where medical marijuana clubs are available.
All other small or large businesses are allowed deductions when they file their federal IRS return. Within states where marijuana is legal for medical purposes, there are companies that deserve fair treatment. There are 23 states and the District of Columbia that now allow medical marijuana; those states collect taxes (or plan to collect taxes) and control the prescription holder.
Before legal marijuana business men and women in the United States can compete fairly, those federal laws must be repealed. A new federal ruling in federal court in San Francisco prevents the DEA from prosecuting medical marijuana dispensaries if they are sanctioned by the state. The Rohrabacher-Farr Amendment prohibits the Department of Justice (DOJ) from using federal funds to block state laws on marijuana. This 1603-page federal spending report essentially ends the use of taxpayer money to block the medical use of marijuana.
Where medical marijuana is legally available, sustainable healthcare has increased and prescription pill overdoses have decreased. Marijuana has been claimed to be a super antibiotic, good for strokes and other brain problems, useful for relieving pain, nausea, Parkinson’s, inflammatory bowel disease, post-traumatic stress disorder, epilepsy and other seizures, kills cancer and Forbes magazine even asked if his elderly father should. Try it.
Dr. Sanjay Gupta has said that we should legalize medical marijuana now. This is a plant that was once listed in the US Pharmacopoeia and is readily available at drug stores. With its use, people have left hospices and hospitals to live more fulfilling lives. The US federal government even has patent no. 6630507 since 2003 for use as an antioxidant and neuroprotective.
The Justice Department issued a memorandum allowing Indian tribes to grow and sell marijuana on their land. Other countries and individuals are also rushing to end their medical ban; for example, Israel uses marijuana in its hospitals and for research. Many senators and governors want it re-legalized for medical use.
The IRS Advisory Code Report says marijuana deals are now legal in some states, but remain illegal under federal law. Marijuana businesses cannot deduct all of their expenses because the federal government says that no deduction or credit will be allowed for any amount paid or incurred if such trade or business (or the activities of the trade or business) consists of substance trafficking. Marijuana under federal law is a controlled substance without medical use; however, the federal government has a patent for medical use.
Those who want to keep medical marijuana illegal are mostly getting rich by being an illegal substance, although many do not pay taxes on the money they earn. This includes corrupt and illegal food growers, traders, trimmers and manufacturers, people who receive taxpayer assistance checks but work in this trade, and those who want to keep marijuana on the black market. They don’t care what citizens want, how they voted, or whether or not it helps a person’s medical condition, as long as they make money.
Medical marijuana users and business owners in states where citizens have voted to legalize marijuana use once again should have regular meetings with state politicians to discuss unfair tax issues. The people have spoken, now it is up to the politician to change those laws.