Federal Tax Returns on Weed!

Let me tell you how it will be....

Below is a link to a white paper by the National Cannabis Industry Association on how the federal tax code is written in order to make a cannabis production and distribution business model pretty unsustainable, if you pay income tax.  I like how the authors provided a real tax return to show exactly how they communicate directly to the federal government about their marijuana enterprise.

The white paper is titled Internal Revenue Code Section 280E:Creating an Impossible Situation for Legitimate Businesses.

This looks like a tough business at this point, largely due to public policy.  This tax stuff, along with a lot of other financial issues will make for interesting debate going forward. There are just so many legal contradictions to be dealt with.

An interesting argument I've heard in Colorado goes along the lines of this: "I voted for decriminalization and legalization in my state because of medical benefits and basic personal freedom. Alcohol is more harmful than pot in many ways.  Of course, there is obvious failure of prohibition, too.  But does that mean that the only way down that common sense path is a commercial model, with a large industry and dispensaries on every corner?"

May 4th update: A recent MJ Business Daily article titled Colorado Cannabis Industry Under Attack on Several Fronts.

Revenue for the Taxman is at stake. Money is driving a lot of this legalization, just like the rest of the world.  As long as the Feds can use the legal complexity to squeeze out ridiculous tax rates from business, they will.  Many of the "leaders" who hope to profit off this legalized industry were also the ones keeping the lid on all those years. The racial components of the hypocrisy now taking place with a shift to legalization are nothing short of astonishing. Look at it on a 20 year time frame. Senators who kept laws in place that punished petty drug crimes and promoted job drug testing now can step into the fold of legalization and get rich all over again. What a country!

An interesting contradiction I notice among a lot of people involved in the industry is between government beliefs in accordance with say, Bernie Sanders, and the obvious need for the industry to have more economic liberty to thrive financially. Should the federal government have more power to dominate and coerce taxpayers, or not?  I say it should have less, especially with regard to the medical cannabis industry, of which I'm a huge fan.