Tag: dispensaries (page 1 of 10)

Landmark Cannabis Court Battle: Harborside Health Center Takes on IRS and Revenue Code 280E

Harborside Health Center is nationally recognized as a leading example of a responsible cannabis business. In May 2016, the Department of Justice dropped a four year attempt to seize Harborside property after the city of Oakland rallied behind founder Steve DeAngelo and his hyper-successful retail operation.


Beginning today, June 6th, lead Harborside attorney Henry Wykowski returns to the SF Federal Building court room to fight one of the most detrimental aspects prohibiting the success of legal cannabis: Internal Revenue Code 280E.

U.S. Code § 280E: “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”

The cannabis industry has been well aware of IRC 280E, and this week’s court battle aims to highlight how this particular tax code should not be applicable to legal cannabis businesses. IRC 280E has resulted in a back tax bill of $2.4 million for Harborside Health Center.

“Section 280E was passed during the height on the War on Drugs, many years before California and twenty-four other states legalized the use of medical cannabis,” said Henry Wykowski, lead attorney for Harborside Health Center. “It was meant to apply to drug dealers, not state-sanctioned cannabis dispensaries. Ignoring the intent of Congress, the IRS has chosen to apply 280E to legitimate cannabis businesses.”

Many experts believe that Wykowski’s plan is to attack the federal definition of cannabis companies. Currently, cannabis retailers are considered as “Drug Trafficking Organizations,” despite being providers of a state-approved controlled substance.

Henry Wykoski, Lead Attorney for Harborside Health Center

Henry Wykoski, Lead Attorney for Harborside Health Center

The Internal Revenue Service’s imposition of IRC 280E on cannabis businesses prohibits legal entities from writing off normal business expenses on their tax deductions. Cannabis Reports has previously detailed the ramifications of IRC 280E in a whitepaper discussion.

Ultimately, tax law is up to the discretion of Congress, and is not subject to enforcement exemptions. With IRC 280E, the intention of Congress is very clear: no tax exemptions for businesses working with Schedule I or II substances.

Steve DeAngelo, Harborside Health Center

At this point, it seems that Congress must re-legislate a cannabis exception to 280E, or the DEA must re-schedule cannabis to Schedule III so that 280E no longer applies.

Congress has certainly approved scheduling exceptions in the past, most notably with tobacco and alcohol, which kill a combined 558,000 people a year according to the Center for Disease Control and National Institute of Health .[1][2]


Cannabis has never been ruled as a direct cause of death in the history of modern medicine, yet remains listed as a Schedule I drug with no “proven” medical efficacy and a high risk for addiction.

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[1] Center for Disease Control and Prevention. Feb 2016 Infographic: http://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/tobacco_related_mortality

[2] NIH: National Institute on Alcohol Abuse and Alcoholism. Jan 2016 Statistics: https://www.niaaa.nih.gov/alcohol-health/overview-alcohol-consumption/alcohol-facts-and-statistics

Another Week in the World of Cannabis: June 3rd, 2016

Cannabis is emerging from the shadows of prohibition. Every week, there are advancements in many fields related to cannabis. Cannabis Reports will be re-capping the weekly events of the cannabis community and industry, so that you can stay up-to-date on the latest developments.

Oregon Launches Recreational Access to Edibles and Concentrates

Oregon voters legalized recreational cannabis back in 2014, and the roll-out of the recreational program has been a little bit bumpy.


While things are not perfect, as of June 2nd, 2016, recreational cannabis consumers are now allowed to purchase edibles, topicals, and concentrates from dispensaries.


There are limits in place for recreational consumers, and dispensaries are only allowed to sell a single low-dose cannabinoid edible with 15 mg of THC or less, a single pre-filled concentrate receptacle, and topicals with no more than 6% THC.

Canadian Cannabis Officials to Speak at FDA Conferene This Month

The Food and Drug Administration is finally taking cannabis seriously. After having sent the Drug Enforcement Agency a recommendation in September of 2015, the FDA will now host officials in charge of Canada’s medical cannabis program.


At a conference slated for later this month, Canadian government officials will conduct a panel examining the legal system in place there.


Reports have suggested that not only is the DEA completely re-examining their stance on cannabis scheduling, but they plan on making a decision on the matter in the very near future.

Possible Landmark 280E Cannabis Business Case

Bay Area attorney Henry Wykowski is fighting hard for cannabis businesses. Last month, the Department of Justice dropped a long-standing case against Wykowski’s client Harborside Health Center.


Next Monday, Wykowski will begin a new trial on behalf of Harborside, this time with the U.S. Tax Court over Internal Revenue Code 280E.

IRC 280E is a major burden on cannabis businesses, and currently keeps the majority of businesses in the red operationally.


Wykowski intends to argue that 280E was never intended to govern businesses operating compliantly under their state’s laws.

The trial should take about a week, although the judge’s decision may not be released until late this year or early next year, according to Wykowski.

Ohio Group Stops Campaign Due to House Bill 523

Ohioans for Medical Marijuna have abandoned their campaign to put a medical cannabis bill in front of voters this November.


Ohioans for Medical Marijuana, backed by national group Marijuana Policy Project (MPP), has stated that they are no longer fighting for the Ohio ballot measure that would have allowed patients to grow and consume their own cannabis plants.


Many supporters are upset that the group has given in so quietly, but House Bill 523, the state legislature’s medical cannabis law, has already passed both houses and is on Governor John Katich’s desk right now. He is expected to sign House Bill 523 in the coming days.

Chronic Cannabis Use May Cause Periodontal Issues

Assistant Professor Madeline H. Meier of Arizona State University, along with fellow researchers, reviewed the findings from the New Zealand study.


The study followed the cannabis habits of 1,037 New Zealanders, and found that cannabis caused no substantial medical issues beyond moderate periodontal health decline.

Enthusiasts Gather For Mass Pot-Smoking Celebration

Meier’s team has used data from this study in the past, including an instance in which he team concluded that cannabis may cause a decline in IQ after persistent use. However, researchers conducting follow-up studies found no evidence of this cognitive decline.

Upcoming Cannabis Events

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Las Vegas Hemp Fest – (Las Vegas, NV: June 4)

Las Vegas Hemp Fest is the #1 leading Marijuana Business seminars & music festival. This is an annual two-day event, held the first weekend of June each year at AMP, the Las Vegas Amphitheater and events park located on Craig Road just up from the Cannery Casino Hotel.

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The Secret Cup – (Portland, ME: June 4-5)

Over 40 hash makers can compete with their best concentrates, from all over the world, to see if they have what it takes to win the golden torch and take the next step to win the belt, in the most legitimate cannabis competition around.


Potluck’s Fantastic Cannabastic – (San Diego, CA: June 5)

Alternative wellness industry professionals, educators, manufacturers, collectives, caregivers, patients, entertainers and more will be at this fantastic event. All California Cannabis patients ages 18+ are encouraged to attend to continue educating themselves about alternative medicines as well as contribute to the operation of their respective collectives. Enjoy a variety of fantastic live music indoors while mingling with our various enlightening event participants.


Cottonmouth Comedy Tour – (Maryland Heights, MO: June 6)

CottonMouth Comedy Tour is rolling it up, and down the west coast bringing you a stage show unlike any other of course with a medicated twist. Come check out some local vendors from the MMJ and recreational cannabis businesses in your local area. Enjoy a full stand up comedy show featuring some of the top up and coming “pot comics” in the WORLD.


Viridian Cannabis Investment Series – (Fort Lauderdale, FL: June 8)

Viridian Capital Advisors, a financial and strategic advisory firm dedicated to the cannabis industry, is proud to announce the third installment in the Viridian Cannabis Investment Series. Investing in the Emerging Cannabis Industry While Managing Risk, is an event that marks the first-ever cannabis investment conference in Florida.

This private event will explore the opportunities and risks in this growing multi-billion-dollar industry and will feature presentations and networking sessions with leading companies, investors, scientists, and thought leaders from the following sectors: Real Estate, Security, Biotech, Cultivation & Retail, AgTech, Lab Testing, Consumption Devices, Infused Products, and Digital Media.


High Times Cannabis Cup – (Clio, MI: June 11-12)

The High Times Michigan Medical Cannabis Cup is returning to the Auto City Speedway in Clio, Michigan for our first ever all-medical event! The event will only be open to medical patients with the entire festival zoned to medicate, but doctors will be available on site. Any state’s medical marijuana qualification is acceptable for admission.


Oregon Hemp Convention – (Portland, OR: June 11-12)

The Oregon Hemp Convention is an unbelievable opportunity for the entire cannabis industry to come together and introduce ourselves to the rush of new cannabis users in the state of Oregon.

With new and exciting legal option available for recreational consumers in the form of concentrates and edibles. Don’t miss out on this great opportunity to introduce yourself to the Oregon public and scope out the finest cannabis Oregon has to offer for yourself!

IMPACT: Brain Health and Cannabis

IMPACT: Brain Health and Cannabis – (Denver, CO: June 12)

The monthly IMPACT Network conference will be on Brain Health & Cannabis Sunday, June 12th, from noon to 5 pm at Green Labs in Denver’s RiNo district. Patients, caregivers, healthcare professionals, and industry leaders are all welcome.

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CannabisNowMagazine.com: Top Cannabis Tech Companies

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For the most up to date info on Cannabis Reports, follow us on Twitter, and like us on our Facebook page. If you see that we overlooked an event this past week in cannabis, please join the discussion in the comment section below, or through our social media links.

Toronto Police Shut Down 43 Unlicensed Dispensaries Under Project Claudia

Earlier this year, Toronto police inspected 78 locations across the city and sent letters for business to apply corrections. All owners and operators were warned that persisting violations would result in legal penalties.


On May 26th, 2016, at approximately at 12pm, police acted on these warnings and executed warrants at 43 storefronts. Approximately 90 people were arrested, 186 controlled drugs and substances charges were laid, as well as 71 criminal charges.

Since March, the number of unlicensed cannabis storefronts have more than doubled, and neighboring communities have increasingly submitted complaints to local authorities. Nearly half of the illegal dispensaries were within 300 meters of schools.

During a press conference this morning, Toronto police detailed the events of the raid as well as the types of charges laid and the cannabis products seized.

  • 269 kilos of dried cannabis flowers
  • 30 kilos of cannabis resin
  • 24 kilos of hash
  • 27 kilos of THC pills
  • 72 kilos of infused chocolate
  • 142 kilos of infused cookies
  • 129 kilos of infused candies
  • “Every flavor of Nutella you could want”
  • 64 kilos of sodas and liquids
  • 126 kill of other oils and spreads
  • $160,000 in cash
  • 23 grams of powder cocaine at one location

There was no standardization among these products, and product potency was not consistently quantified. Adults consuming products from these stores would have to trust the unlicensed business operators to label their products properly.


Also noted was the fact that unlicensed cannabis dispensaries do not have the same commitments to health concerns. Without any regulatory oversight and no threat of losing a license, the police allege that these businesses were operating loose, unlawful cannabis outlets.

As the Toronto Police Chief Mark Saunders began to take questions from those attending the press conference, the tense emotional state of Toronto became quickly apparent.


The very first gentleman to speak out questioned whether the police had any real documentation as to the lack of quality control and consistency between the products.

He also lamented that fifty-five to seventy complaints from the community does not equal the thousands of people who will now have difficulty accessing cannabis with the closure of these stores.


The questioners began calling out: “Where are the victims? Where are the victims?” Eventually many disruptive questioners were asked to leave.

Legally, the only way a dispensary can lawfully operate is to receive a license from Health Canada. In order to receive a license, a dispensary would also have to abide by food handling and distribution regulations.

Police were adamant that the 43 dispensaries raided Thursday were also in violation of food laws, and knew that their operations were unlawful.

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Thursday’s raids brought up many concerns about future patient access, and activist Marc Emery was already rallying in support of the 90 people arrested.

Cannabis Reports covers events that are important to the cannabis community. For the most up to date info on Cannabis Reports, follow us on Twitter, and like us on our Facebook page.

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