Report Shows Arizona Could Gain $48 Million In Taxes Annually From Regulating Marijuana


According to a report acquired by the Phoenix New Times, Arizona stands to gain $48 million in tax revenue annually by regulating marijuana like alcohol:

The Joint Legislative Budget Committee produced a report in September on the estimated impact of legal marijuana, but didn’t release the data publicly. New Times obtained a copy of the report this morning.Arizona

Prepared in response to a legalization bill proposed earlier this year by a group of Democrats, the JLBC report shows that Arizona could enjoy a large boost in revenue for schools, health care and other services simply by taxing people who already use marijuana.

The Democrats’ bill would have made marijuana legal for adults 21 and older, and would have allowed the plant to be sold in retail shops with an added $50-per-ounce tax.

The bill died in committee back in April, but a similar measure could be revived when the legislature reconvenes in January. Whether or not lawmakers do anything, Arizona voters are likely to see a legalization initiative on the ballot in 2016. Coordinated by the Marijuana Policy Project, the initiative is still in the drafting stage but will almost certainly include a tax-collection scheme.

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Federal Lawsuit Filed to Derail Washington State from Collecting Taxes on Marijuana Sales


Martin Nickerson
Martin Nickerson, owner of Northern Cross Collective Gardens

Martin Nickerson has filed a federal lawsuit against the state of Washington, attempting to bar the state from collecting taxes on marijuana sales. Washington state officials are demanding that he pay taxes on those sales to the tune of $62,000. However, since Nickerson is under prosecution for the criminal sale of marijuana as a medical marijuana producer, he claims that forcing him to pay taxes on his sales would violate his constitutional right against self-incrimination.

Alison Holcomb, an attorney with the American Civil Liberties Union who was the main author of Washington State’s successful ballot initiative, said the lawsuit has a low probability of taking down the state’s legal marijuana system.

Suppliers like Nickerson have already made public their intent to break federal law, Holcomb said, so paying taxes on their proceeds would not do much to further incriminate them.

“Paying taxes on marijuana implicates you, but so does everything else about being engaged in this system,” she said.

Ultimately, the case brings into question whether federal laws trump state laws when it comes to collecting tax revenue generated from marijuana sales. The outcome of this case could have a significant impact on medical marijuana businesses around the country.

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Colorado Lawmakers Set Up Banking System for Marijuana Industry


CO flagColorado lawmakers moved the marijuana industry away from its cash-only roots on Wednesday when they approved the world’s first financial system for marijuana businesses. The plan sets up a network of uninsured cooperatives, which gives the industry an avenue to basic banking services.

Even in light of Eric Holder’s comments on banking, marijuana businesses have still had a hard time finding banks to even let them open checking accounts, for fear of committing a federal crime. According to an AP article by Kristen Wyatt, “Shop owners in the state say a small number of credit unions will do business with them, too, though no banks or credit unions have said so publicly.”

Colorado’s new plan for banking would let marijuana business pool money in cooperatives, which would let stores accept credit cards and checks. However, these co-ops would need U.S. Federal Reserve approval first.

The plan has bipartisan support, partially because it gives the state the ability to audit marijuana shops and make sure they are paying taxes. Even Gov. John Hickenlooper supports the plan, and has pledged to sign it into law once he receives the final language of the bill.

Establishing a co-op-based banking system for marijuana businesses reduces the risk of crime by moving large cash reserves out of stores and into banks. It makes the industry more accountable and establishes a system that other states can follow as they begin to tax and regulate marijuana.

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New Hampshire Legalization Bill Making Progress In Legislature


The New Hampshire House Ways and Means Committee voted to amend HB 492, which would make marijuana legal and regulate it like alcohol, in order to simplify the tax structure and regulatory language. The committee then voted 14-5 to recommend that the House not pass the bill, which would also allow people 21 and older to possess up to an ounce of marijuana. The House is not bound by this recommendation, and will vote on whether the bill should progress to the Senate soon.

The committee’s amended bill taxes and regulates marijuana by imposing a standardized $60 per ounce tax on growers. Advocates claim the tax will generate approximately $25 to $30 million annually.

MPP’s Matt Simon commented that, “Even with a negative recommendation, this thoughtful amendment will make it much more likely that the bill will receive continued support from the rest of the Legislature. We are optimistic that New Hampshire lawmakers will recognize that their constituents do not want to see adults arrested for using a substance that is safer than alcohol.”

When the bill returns to the House, it will have a battle with its new amendments, especially since it passed the House with a 170-162 vote on January 15. Sixty percent of New Hampshire adults support HB 492, according to a WMUR Granite State Poll released in October by the University of New Hampshire Survey Center. Just 36% said they are opposed. The entire poll is available at:

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California Democrats Officially Add Marijuana Legalization to Platform


California Democrats approved adding a position in support of taxing and regulating marijuana to the party’s platform Sunday, despite opposition from Gov. Jerry Brown (D). This is a major shift in the Democratic Party stance on legal marijuana use in the Golden State, and was spearheaded by long-time activist Lanny Swerdlow and the Brownie Mary Democratic Club.

California was the pioneering state for medical marijuana, which was made legal in 1996, but since then has stalled on creating a regulatory structure for cultivation or sales, and the legislature has been unwilling to seriously consider making marijuana legal for adults.

Lt. Gov. Gavin Newsom

Leading up to the party shift this weekend, Lt. Gov. Gavin Newsom, formerly the mayor of San Francisco, made the case for marijuana, swaying moderate Democrats by reassuring them, “You can be pro-regulation without being an advocate for drug use.”

Newsom’s advocacy was contrary to Gov. Brown’s interview on “Meet the Press” the last week, in which he voiced peculiar concerns over marijuana’s effect on alertness. “The world’s pretty dangerous, very competitive,” Brown said. “I think we need to stay alert, if not 24 hours a day, more than some of the potheads might be able to put together.”

The platform language specifically calls on Democrats to “support the legalization, regulation and taxation of marijuana, in a manner similar to that of tobacco or alcohol.” The tipping point in this shift may stem from Colorado’s preliminary tax revenue generation of $2 million dollars for the month of January. However, revenue clearly is not the only factor; a recent Field Poll found a 55% majority of voters support legalization.

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Oregon Democrat Earl Blumenauer Teaming Up With Grover Norquist to Push Marijuana Industry Tax Reform


Grover Norquist

In yet another case of people with disparate political ideas coming together to support marijuana policy reform, Rep. Earl Blumenauer (D-OR) and Americans for Tax Reform (ATR) president Grover Norquist held a press conference Thursday to announce the release of a white paper protesting the unjust application of tax codes to marijuana businesses, Legal Cannabis Dispensary Taxation: A Textbook Case of Punishing Law-Abiding Businesses Through the Tax Code.

Under current policy, marijuana businesses are not permitted to deduct many of their operating expenses and are forced to pay significantly more taxes than other industries.

Earlier this year, Rep. Blumenauer introduced H.R. 2240, the Small Business Tax Equity Act, to eliminate the unfair treatment of legitimate marijuana businesses by the IRS. The bill is supported by ATR, the National Cannabis Industry Association, MPP, and more than a dozen members of Congress.

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Investigation of Drug Treatment Centers Finds Widespread Corruption


A recent investigation into drug treatment centers in southern California found rampant financial corruption and inflated reporting of patient attendance.

The investigation, conducted by the nonprofit Center for Investigative Reportingcirsm.jpg.221x0_q85_crop and CNN, found that dozens of clinics showed signs of deception and questionable billing practices. The two worst offenders, Able Family and GB Medical Services, were virtually empty storefronts run by convicted criminals that bribed clients and submitted fake names to a government insurance provider in order to collect millions in taxpayer money. Over the past two years alone, the clinics indicted by the investigation received $94 million in public funds.

According to CNN’s interviews with former state officials, California’s Department of Health Care Services has “fielded concerns about rehab clinic fraud for at least five years yet has done almost nothing to combat it.”

While these findings demonstrate the need for reform in California’s regulation of drug treatment centers, they also provide additional evidence that the number of people in treatment for marijuana use is inflated.

A 2010 report by the U.S. Department of Health and Human Services found that a majority (57%) of participants in drug treatment programs for marijuana were referred there by the criminal justice system. In other words, users who were arrested for simple possession were offered the choice of “treatment” or jail time.

With all of the money to be made from these programs – through forced attendance or unscrupulous government agencies forking over taxpayer money for fake clients – it is of little surprise that some of the most vocal critics of marijuana policy reform own and operate treatment clinics.

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Bill to Tax and Regulate Marijuana Introduced in Pennsylvania


Pennsylvania recently joined the growing list of states considering taxing and regulating marijuana like alcohol this year, when Sen. Daylin Leach (D-17) introduced SB 528. The proposal was referred to the Senate Law and Justice Committee on April 3.

Daylin Leach PA family
Sen. Leach and family

Sen. Leach’s bill, the Regulate Marijuana Act, would allow adults 21 and over to possess, grow, process, or transport up to six marijuana plants (three or fewer being mature) and possess the marijuana produced by those plants where they were grown, provided that the growing takes place in a secure location. In addition, adults would be allowed to give away up to one ounce of marijuana to other adults who are 21 or older.

SB 528 would task the Pennsylvania Liquor Control Board with licensing marijuana-related facilities and regulating the cultivation, distribution, and sale of marijuana to adults 21 and over. In terms of taxation, the bill calls on the General Assembly to enact an excise tax on marijuana sold or transferred.

If you are a Pennsylvania resident, please contact your legislators now, and ask them to support taxing and regulating marijuana in a manner similar to alcohol.

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Alabama Bill Would End State’s Marijuana Prohibition


Last week, Alabama joined the growing list of states considering taxing and regulating marijuana like alcohol this year. Sponsored by Rep. Patricia Todd (D-Birmingham), HB 550 would remove all criminal penalties for possession of marijuana by adults. The proposal was referred to the House Committee on Public Safety and Homeland Security, but has not yet been scheduled for a hearing.

Rep. Patricia Todd

Rep. Todd’s bill, the Alabama Cannabis and Hemp Reform Act of 2013, would allow adults 21 and over to possess up to one ounce of marijuana and cultivate up to 12 plants in a secure space. It would tax marijuana similarly to alcohol and would task the Alabama Department of Revenue with licensing retail outlets and regulating the cultivation, distribution, and sale of marijuana to adults 21 and over.

In addition to allowing a regulated and taxed marijuana industry, HB 550 would also set up a medical marijuana program. The bill would authorize the medical use of marijuana for qualifying patients who have been diagnosed with serious medical conditions by their physicians.

If you are an Alabama resident, please contact your legislators now and ask them to support HB 550!

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Maryland State Lawmakers to Consider Regulating and Taxing Marijuana Like Alcohol


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Del. Curt Anderson

The Maryland House of Delegates will debate whether or not the state should permit the establishment of a legal market for businesses to sell marijuana to adults 21 and older. Delegate Curt Anderson (D-Baltimore City) introduced H.B. 1453 on Thursday. If passed, the bill would make marijuana legal for adults 21 and older and establish a system in which marijuana is regulated and taxed like alcohol. The proceeds from the bill’s stipulated excise tax will be used to offset implementation and fund treatment programs to prevent alcohol, tobacco, and drug abuse.

“It is time for a new, more sensible approach to marijuana in Maryland, and that is what this bill proposes,” said MPP deputy director of government relations Dan Riffle.


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