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Cannabis taxes will drive consumers back to unlicensed channels
Common sense, anecdotal conversations and third party reports tell us that the unlicensed pot industry is growing and will always be larger than the licensed industry. One report in September 2019 estimated that the unlicensed industry in California is three times larger than the licensed industry. In other states the unlicensed industry approaches 100% of…
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Tax Court upholds “gross receipts method” to determine tax liability
A recent U.S. Tax Court Case captioned “Raymond Chico and Ruby Chico v. Commissioner”, Respondent upheld the use of a very simple tax accounting tool by the IRS in determining the tax liability of a cannabis-related business. The IRS used the ‘gross receipts method’ to add up all receipts from all sources and determined that…
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Tax Court upholds IRS over legal dispensary
A recent U.S. Tax Court case challenged the ability of the Internal Revenue Service to deny all tax deductions as invalid for a cannabis-related business. The business “Northern California Small Business Assistants Inc.” was a legal dispensary in California. The Tax Court denied all of the arguments of the business as invalid and upheld the…
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Big Marijuana Enters South Jersey
This week Acreage Holdings, one of the world’s largest vertically integrated international marijuana companies, said it was buying “100% of the equity interests” in Compassionate Care Foundation in Egg Harbor in anticipation of the New Jersey’s intention to legalize cannabis for adult recreational use. Compassionate Care Foundation’s vertically integrated operations include licenses for cultivation, manufacturing…
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Looking past decriminalization
This coming week our federal legislature will take up a bill to decriminalize cannabis. Most states, including ours, are attempting similar measures. But my form’s focus isn’t on these proceedings. In fact, we have little confidence in the near term outcome. That timeline really doesn’t matter in the big picture. What we know is that…
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November 2019 update on cannabis in NJ
Here’s where we are with the insanity and injustice of cannabis law in our part of New Jersey right now. The state’s next dispensary will open in about a month here in Vineland. Initially the facility will be open for training; its locally grown cannabis supply won’t be available until next year. The facility is…
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Eight Inconvenient Truths About the Cannabis Industry (that nobody is talking about)
CPAs in the cannabis industry are not being candid, honest and straightforward in talking about the cannabis industry. While I’m not suggesting that there are any easy corrections available for current positions, I do think that it makes sense for us to address the facts directly and honestly.1 A headline in a CPA newsletter today…
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Cannabis banking bill passed by House
Today the U.S. The House of Representatives passed a cannabis reform bill for the first time. The new law would permit cannabis businesses to access banking and financial services. The bill passed in a vote of 321-103. A total of 230 Democrats voted in favor of the bill while 91 Republicans also voted for the legislation.…
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Federal cannabis banking law introduced
This coming week the U.S. House of Representatives will introduce H.R. 1595, the SAFE Banking Act of 2019 that is intended to legalize cannabis banking. The bill has already cleared the Financial Services Committee and is expected to be voted on through a process known as ‘suspension of the rules’ that requires two-thirds of the…