Tuesday, March 15, 2011
Through the IRS and the Department of Justice, the Obama administration is signaling a much tougher position towards medical marijuana dispensaries.
In Northern California, the Marin Alliance for Medical Marijuana has been told by IRS officials that it cannot deduct any of its business expenses from its taxes—resulting in the dispensary owing millions of dollars to the federal government.
The basis for the position stems from a section of the federal tax code that forbids the deduction of any business cost related to trafficking in controlled substances.
Steve DeAngelo, director of Oakland’s Harborside Health Center, one of the nation’s largest dispensaries, warned that if the IRS adopts this position towards all medical marijuana businesses, “Every dispensary in the nation, past, present and future is dead.”
The city of Oakland had planned to develop large, indoor medical marijuana farms as a means to increase revenues and close a $31 million budget deficit. But those plans are now on hold since federal law enforcement officials told the city council that Washington disapproves of the idea.
-Noel Brinkerhoff
IRS Tells Fairfax Medical Marijuana Dispensary It Owes Millions In Unpaid Taxes (by Richard Halstead, Marin Independent Journal)
Oakland’s Plan to Cash in on Marijuana Farms Hits Federal Roadblock (by Malia Wollan, New York Times)
Feds Warn Oakland Against Medicinal Pot Farms (by Sean Maher, Oakland Tribune)
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