In the midst of tax season, the paradox of tax-paying marijuana business owners being treated like criminals takes center stage. The San Francisco Chronicle recently described the scene as marijuana retailers brought bags of cash to tax administration offices. Some retailers reported bringing in up to $80,000 at a time.
But what other choice did they have? California has opened the door for legal recreational sales with the implementation of Proposition 64 this year, which is bringing a new wave of money-making opportunities for cannabis entrepreneurs. And where there is money-making, there are also taxes. These businesses want to pay their taxes, but without the option of processing transactions and savings in a bank like a normal business, cannabis companies end up paying taxes with cash out of bags.
As our marijuana attorneys can explain, at the heart of this issue is Controlled Substances Act, 21 U.S.C. Section 812. According to the federal government, marijuana is classified as a Schedule I narcotic under this act. A Schedule I classification means that a drug “has high potential for abuse” and has no accepted medical use in the United States. And even under medical supervision, it would not be considered safe to consume. Obviously, nothing could be further from the truth when it comes to marijuana. For more than 20 years, cannabis has been offering relief to patients in California for everything from cancer to arthritis to anxiety thanks to the Compassionate use Act of 1996. Continue reading