Category: aBIZinaBOX Inc. and Jordan S. Zoot

California Repeals 280E for Personal Income Tax – Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities and authorizes persons to conduct specified commercial cannabis activities, as defined, in the state.

The California Dept. of Tax and Fee Administration [“CDTFA”] just issued a set of regulations that apply to the “Marketplace Facilitator Act”. This new law which has been unnoticed by most in California’s cannabis industry could be applied to Weedmaps and others who facilitate sales of cannabis to California residents.

We don’t have experiences that impress or “WOW” us very often. Perhaps we have become jaded. However, we had one today, and are still attempting to digest it. We spend most of our time working in the commercial cannabis industry in California – complaints about the complexity of licensing, tax reporting and regulatory compliance are constant. The implementation of the METRC compliance system in California became a running joke with single and double digit usage out of thousands of licensees.

CA AG’s Office Press Release February 2019. “Friday, February 22, 2019 .California Attorney General Xavier Becerra and Assembly woman Lorena Gonzalez (D-San Diego) today at the Port of San Diego unveiled legislation to substantially strengthen the state’s efforts to combat the illegal underground economy in California that targets the most vulnerable members of our community. Assembly Bill 1296 will expand California’s unique, multi-agency task force of law enforcement professionals known as the Tax Recovery and Underground Economy (TRUE) Team that currently operates out of Sacramento and Los Angeles.”

Un Pesce Marcisce Dalla sua Testa is an old Sicilian proverb that translates “a fish rots from its head”. The statement appears to be an accurate summary of present condition of both the private and governmental sides of California’s cannabis industry.

Who is Inept? – We were surprised a few days ago when we discovered California Cannabis Industry Association (“CCIA”) has been suspended by the Franchise Tax Board (“FTB”).  At the moment CCIA lacks the authority to engage in business.  We stumbled across this information quite inadvertently.  We were checking to see if the National Cannabis Industry Association (“NCIA”) was authorized to engage in business in California as a foreign corporation.

What about medical cannabis cooperatives?  What about adult-use cannabis collectives and cooperatives?  Depending on who you ask the answers will be, Yes, No or Maybe.  All three of these answers may be correct answers to all of these questions.  The questions are not as simple as they appear to be.

This is the last of the four articles we decided to publish to illustrate the savings for consumers, and additional profits for cultivators, that can be produced through the use of a properly organized Cannabis Cooperative Association (“CCA”). This article describes the savings for consumers, and the additional profits for cultivators, that can be produced through the movement of extracted oil as medical cannabis through a fully integrated CCA.

On August 6th we published an article that described the financial benefits of the use of a properly organized Cannabis Cooperative Association (“CCA”) to move cannabis as adult-use flower from cultivator to consumer. [See CCA’s Beat Underground ] On August 8th we published an article that described the financial benefits of moving cannabis as adult-use oil through a CCA. [See CCAs Create Profits ]This article describes the additional financial benefits of moving flower from cultivator to consumer through a CCA as medical cannabis rather than as adult-use cannabis.

We have spent the past couple of articles reviewing the differences between “bookkeepers”, “generic accountants”, and “professional accountants”, the final phrase being limited to certified public accountants [‘CPAs” in the United States[1]. We add mention of Enrolled Agents [“EAs”][2] noting that they are “Circular 230 Practitioners” many of whom, are or have been employed by the Internal Revenue Service, and may be skilled at “Tax Resolution[3]”.

Bringing Back The War – A bit of background on illegal storefront dispensaries tells us And the enforcement in California will come from both state and local authorities. The City of Los Angeles recently launched a massive crackdown on unlicensed, illegal cannabis businesses, filing misdemeanor charges against more than 500 people and shutting down 105 illegal cannabis businesses, including cultivation operations, extraction labs, and delivery companies across the city. In Los Angeles, a charge of unlicensed commercial cannabis activity within the city carries a potential sentence of six months in jail and $1,000 in fines.

On August 19, 2019, the Supreme Court of California issued a unanimous opinion in Union of Medical Marijuana Patients, Inc. (“UMMP”) v. City of San Diego. Except for the parties and the limited number of individuals who follow litigation involving environmental law, this case has moved through the California court system with little notice. ……..” Because the City found that adoption of the ordinance did not constitute a project for purposes of CEQA, it did not conduct any environmental review. Petitioner Union of Medical Marijuana Patients (UMMP) challenged the City’s failure to conduct CEQA review in a petition for writ of mandate, which was denied by the trial court.”

Jordan follows up his Cannabis & Sharia Law Article of a couple of weeks ago with this piece. He writes, “we hope that some of our readers enjoyed our initial attempt at explaining the basic principles of Sharia as applied to both Medical Cannabis and basic rules of finance. At the end of our article, we appealed for assistance in sourcing information about more advanced aspects of Sharia Finance. Well, one of Cannabis Law Report’s followers provided the next piece in the puzzle……..”

Jordan rounds up some of the issues that are concentrating the minds of those in the state’s cannabis sector.

We were prompted to write this article by the five items identified by California NORML in its news of the week.  “News” relating to California’s cannabis industry appears to be of the same ilk as the “News” each day from our Capitol.  “News” and “Fake News” like “Beauty” are in the eye of the beholder.

IRS Updates CTR Exams – While we do a very significant amount of writing for our clients, partners, friends and the cannabis industry in California as a whole, we also do a very substantial amount of reading, and perhaps our three “go-to reads” are

IDPH Making Effort – we are somewhat pleasantly SHOCKED and SURPRISED that the Illinois Dept. of Public Health in particular, and State of Illinois government, in general, seems to be making a REAL and CONCERTED effort to implement cannabis policy.

CA DOJ Medical Cannabis Rule Summary -The 16-page document from Attorney General Xavier Becerra’s office is “a good, solid first step” for enforcement, Kazan said. It spells out what is and what isn’t lawful grow.“I appreciate that it is coming from the top,” he said. The document summarizes more than 20 years of state laws, regulations, and guidelines concerning the growing, distribution and transportation of medicinal cannabis in the Golden State. The purpose of the release was “to reflect the evolution of cannabis legalization in California,” according to a statement from the Attorney General’s Office.

On August 6th we published an article that illustrated the savings for consumers and additional profits for cultivators that could be produced through the use of a properly organized Cannabis Cooperative Association (“CCA”). This article describes the savings for consumers and the additional profits for cultivators in movement of cannabis in the form of extracted oil.