Medicinal marijuana users in Montana face a 6 percent tax on their purchases if lawmakers approve a proposal that would help bolster the state budget. Reports local media.

9 & 10 news reports….The state of Michigan currently charges a six percent sales tax on recreational marijuana along with a ten percent excise tax. Barton Morris with Cannabis Legal Group gave us a closer look at how those taxes break down.“That money does go to the general fund, but it is earmarked for specific projects including schools, roads, but also some of that money is going to go back to the communities in which these facilities are created,” said Morris.

On November 20, the House Judiciary Committee approved a bill that would legalize cannabis at the federal level and allow states to decide whether they will permit legal sales within their borders. From a tax perspective, the most attention-grabbing provision in the Marijuana Opportunity Reinvestment and Expungement (MORE) Act is a new 5 percent federal tax on sales of the drug. But this may not actually be the most consequential tax policy change in the bill.

Karla J. Brannen, CPA, Albin, Randall & Bennett, Portland, Maine write, “For decades, cannabis, derivatives of cannabis, and related substances such as hemp and marijuana were classified as Schedule I narcotics under the 1970 Controlled Substances Act. Federally, the production and sale of marijuana have been and remain illegal, although a marijuana business remains obligated to pay federal income tax on its taxable income under Sec. 61(a).”

The Denver Afterschool Alliance receives $1.5 million a year from the city’s collected marijuana tax revenue,

The Signal Tribune reports, “Tom Modica, acting city manager, stated in a memo to the council dated for Dec. 3 that cannabis tax-rates can range from 0% to 12% by law, as approved by Long Beach voters, and currently range from 6% to 8%.”

“A cannabis company has appealed its case against the IRS at the Ninth Circuit in an effort to soften the blow of a policy that can push state-legal marijuana businesses’ tax rates to upwards of 70%.”

Those of you beginning to pick up regulated cannabis clients might find this article a useful and interesting read.

The most difficult regulatory aspect to deal with is the topic of taxation, primarily where non-First Nations people are buying cannabis products on-reserve without paying taxes back to the province. What has been learned from tobacco sales is that vendors on-reserve will not comply with provincial taxation rules and remit to the province. Provinces that intend to pursue the same approach with cannabis as they took with tobacco are not likely to get far into the conversation with First Nations.