Recently, the government of Mississippi announced that MPP will not be able to raise any funds within the state, which could hamper efforts at reform there and throughout the South.
MPP's Executive Director Rob Kampia writes:
The Mississippi government is saying that MPP is prohibited from raising money in that state because I'm a convicted felon.
Worse yet, we're not even allowed to raise money in Mississippi to challenge the state’s stupid fundraising law.
This isn’t the first time MPP has been discriminated against.
For example, (1) MPP almost lost our employees' retirement plan until a member of Congress intervened, (2) the bank where we've been doing business for 20 years won't give us a line of credit because they don't like our "mission," (3) we had trouble opening a brokerage account, (4) we had trouble getting credit card processing for our five ballot initiative committees, (5) numerous landlords wouldn't lease office space to us or our campaigns, and (6) the IRS has audited us twice.
And now we can't raise any money in the entire state of Mississippi because of a marijuana conviction 26 years ago?
Oregon Democrat Earl Blumenauer Teaming Up With Grover Norquist to Push Marijuana Industry Tax Reform
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.
As part of the federal government’s escalating efforts to shut down the medical marijuana industry, the IRS is claiming that Harborside Health Center, an Oakland dispensary that is thought by many to represent the best practices in the industry, owes them roughly $2.5 million in back taxes. The reason for this is that during the audit, the IRS would not let Harborside deduct many of its business expenses.
Most of these expenses were for things that all other legitimate businesses are allowed to deduct, such as rent and payroll. They were, however, allowed to deduct the actual marijuana being given to patients. The reason for all this is Section 280E of the Internal Revenue Code, which basically allows the IRS to fully tax any group it considers a drug trafficking organization. This is mostly used to snare actual drug traffickers for tax evasion, much like the way Al Capone was finally arrested. Criminal kingpins are not known for filing taxes and reporting their illicit income.
The IRS claims that Harborside, and all other dispensaries, are criminal organizations, so they can’t make any of the deductions other businesses make. But they will still take the money. Many are worried that this will destroy the industry by making it impossible for most dispensaries to afford to stay in business.
MPP is currently pushing a pair of bills through Congress that would remove this threat to patients and providers, as well as allow banks to do business with dispensaries without fear of federal prosecution.
While we’re waiting for Congress to act on these bills (and it may take a while), feel free to contact the IRS and tell them that tax-paying medical marijuana businesses are legitimate and should be treated as such. They are not drug dealers.
Here’s the number: 1-800-829-4933
National Cannabis Industry Association, Rep. Jared Polis Lobby Congress On Behalf of Medical Marijuana Industry
From today's press release:
The National Cannabis Industry Association, the first national organization dedicated to advancing the interests of cannabis-related businesses, today discussed the federal legislative needs of the industry at an event at National Press Club. Prominent leaders in the industry joined Congressman Jared Polis (D-CO), as well as the manager of See Change Strategy, an independent firm that, on March 23, released the first-ever financial analysis of the legal medical cannabis industry in the U.S. This report, based on interviews with more than 300 individuals involved in the industry, projected the total legal medical cannabis market at $1.7 billion in 2011.
"Coloradans have known the positive economic benefit of the cannabis industry for quite some time," said Congressman Polis. "Thanks to the voters of Colorado and the regulations established by the General Assembly, we have a vibrant new legal industry. Colorado's entrepreneurial spirit is strong and our local and state governments are enjoying both the increased revenues from the taxation of the sale and production of medical marijuana as well as the reduced human and financial cost of fighting crime. This report should serve as an important signal to all states considering reforming marijuana laws as well as to the federal government that in a comprehensive regulatory environment, the cannabis industry — like any other industry — can provide jobs, revenue for government and most importantly keep this substance out of the hands of children and vulnerable populations."
"This is not an industry looking for special treatment but an industry looking to be treated on par with other small businesses,” said Polis. “We in Congress need to ensure that this industry can access banking, be treated like any other business under the tax code and has regulations to ensure the safety and efficiency of the market."
Industry leaders highlighted the unique problems they confront as businesspeople. In particular, they described the looming challenge presented by Section 280E of the Internal Revenue Code, which, according to the IRS, prevents them from deducting legitimate business expenses.
“We do not believe 280E, which was intended to apply to individuals who were clearly engaged in illegal behavior, should be applied to legal, licensed organizations like Harborside Health Center,” offered Steve DeAngelo, the executive director of the dispensary by that name in Oakland, California. “Harborside is not a drug trafficking organization, we are a community service organization. Standards that were intended for street dealers of harmful drugs should not be applied to those easing the suffering of seriously ill patients.”
Another member shared the ongoing ordeal many organizations face as they attempt to secure and maintain accounts at financial institutions fearful of violating federal law.
“To say that it is frustrating having one bank account after another shut down is an understatement,” said Jill Lamoureux, managing member of Colorado Dispensary Services. “Access to banking is crucial for this emerging alternative healthcare industry. The capital-intensive nature of start-ups calls for traditional banking services, including credit facilities and equipment leasing options. And as the State of Colorado implements the first statewide regulatory system for medical marijuana, electronic banking and recordkeeping is essential for audit and tracking purposes.”
Meanwhile, Aaron Smith, the executive director of the National Cannabis Industry Association, touted the economic benefits of the industry and conveyed the mission of the organization.
“The nation's legal medical cannabis market is now worth nearly $2 billion annually and supports hundreds of small businesses and thousands of jobs,” said Smith. “All indications point to significant expansion of this sector of the U.S. economy in the years to come and the National Cannabis Industry Association was formed to provide the industry with a voice on the national stage along side other legitimate business interests.”
Other members of the National Cannabis Industry Association present at the event were Brian Cook, founder and president of Altitude Organic Corporation; Tripp Keber, managing director and sole owner of Dixie Elixirs & Edibles, LLC in Colorado; and Michael Backes, a member of the board of directors of Cornerstone Research Collective in Los Angeles, California.
The mission of the National Cannabis Industry Association is to defend, promote, and advance the interests of the cannabis industry and its members. NCIA publicly advocates for the unique needs of the emerging cannabis industry and defends against those aiming to eliminate the legal market for cannabis and cannabis-related products. For more information, please visit www.TheCannabisIndustry.org.