
Medical marijuana dispensary (photo: Thomas Hawk)
The problem is not that Harborside has been involved in any form of tax evasion or attempts to defraud the government. The issue is that the IRS has determined that an obscure provision of a 1982 federal law prevents a marijuana dispensary from qualifying for the standard deductions that any other normal business could use. From the San Francisco Chronicle:
Harborside Health Center owes the Internal Revenue Service back taxes for 2007 and 2008, based on a federal law prohibiting marijuana dispensaries – unlike other businesses – from deducting payroll, insurance, rent, workers’ compensation and other operating costs from its revenues.
“We think this assessment is unfair and inaccurate. We have no choice but to fight this,” said Harborside executive director Steve DeAngelo. “I’m profoundly concerned on behalf of our patients.”
The precedent the IRS is trying to establishing with this Harborside case could easily cripple or destroy the entire medical marijuana industry in this country. The result could be thousands of Americans all over the country losing their jobs in the industry and thousands of patients losing their safe access to the medicine they depend on.


34 Comments
Even normal businesses get extra tax breaks. Fair tax on fair trade! Revolution is long overdue, rise up, fight for your rights a vote these biggets out if office. Ron Paul/ Marc Every 2012!
I will assume the Republicans will be screaming all day long on Fox News about high taxes killing these businesses.
What’s the agenda behind the O admin persecution of med MJ? Is it PhRMA?
This is the largest and possibly most important of the Obama administrations many assaults on medical marijuana.
Yep and it looks like irs has now taken the lead in this fight since doj has step aside. Just more hopism from 0
Gee, how could I ever have figured that obscure link all by myself. /s
So tax breaks for companies that export jobs to China but no tax breaks for good paying American jobs?
Or Democrats will suddenly claim that higher taxes don’t spur economic growth.
Me, I’m hoping for the day when possession of a simple joint won’t be cause for a year long stay in the slam.
Big Oxy especially they got more Oxy mills in one Florida county than they do McDonalds, but lets not forget the beer companies. People who work hard labor need something for the pain when they get hurt and big Pharma wants you taking addictive pills instead of non addictive pot.
How much money has big Pharma and the beer companies given the GOP/Dems so far this year?
President Obama wants the Cops to have a reason to keep putting young African Americans in Prison! How much has the private prison industry given him? Break Prison Unions get the law and order vote then break the police union next seems to be the plan.
A triple play of evil!
Knowing how strongly young people feel about drug legalization,the oligarchs must have ordered Obama to let the dogs out.Besides big pharma,lobbyists for the prison-industrial complex really want to eliminate medical marijuana.
OT: Palin announces that she is QUITTING the Republican Primary before she actually enters the race.
Someone musta told her to STFU.
I say: Palin’s past her sell-by date and is no longer relevant. The Grifter better hope that she’s, uh, “buttered” Roger Aisles’ bread just right so that she continues on her lazy slacker gravy train.
Talk about making money for doing nothing…. Palin’s the poster child for corporate hand-out welfare.
Back to topic at hand: think the PTB don’t want maryjane legalized for tons of reasons. BigPharma is def. behind it, as is the Prison Industrial Complex.
Plus let us not forget that boo makes you happy, silly, *tolerant* & mellow. USG wants it’s citizens angry, hating, intolerant, etc.
They want to split the Cain, Michelle vote with Sarah but make sure Sarah does not accidently win and beat Mitt the Powers that be must have made a decision that Obama must win the election this year and take blame for the economy.
This is stupid push pot underground again and people who were use to having legal pot will grow their own that means no tax revenue for the Feds.
How many people here know someone who got addicted to pain killers and then moved on to harder drugs?
A friend gets hurt I know I would tell them get rid of the pain killers and smoke pot.
Demand for pot will increase as long as Florida is selling Oxy like candy to anyone nobody wants to end up like Rush Limbaugh granted he was fat and crazy before the pills but it certainly did not help.
I wonder if Oxy and beer sales are down because of the economy and to boost sales big Pharma and Beer need to squeeze the competition?
Over-the-counter US marijuana access was apparently not as appealing to US crime enforcement efforts and Homeland Security concerns by opening up new areas for growth of gang and black market suppliers and the inherent violence and death attached to the later. Great fucking logic.
Medical Marijuana is a terrible idea. It’s illegal for one thing. And all it does is get you used to having to get a prescription, and paying through the nose like you do for all your prescriptions. Marijuana should have the same legal status as anything you grow in your garden. You don’t have to consult a doctor to get tomatoes or go to jail for growing basil.
I’m still smoking old fashioned, black market, Mexican Pot. It’s cheap, plentiful and available. Lets just forget about medical marijuana. It’s an invention of the ass holes who want to enslave us. Lets focus on rounding up the authoritarians and throwing THEM in prison.
Of course, complete decriminalization is the proper path for pot.
workingclass probably does not live in California. If you did, you would probably have experience with how easy it is to get really potent bud via the MM route. There are storefront offices down on the beach with doctors who specialize in MM prescriptions. There are price wars and you can get a script for around $40 and then you can go to the excellent dispensaries where you can get a good supply of really good bud for about $50 or $100.
“I had a headache once” I put on my application.
“The precedent the IRS is trying to establish”
The precedent is already there with roots of this actually going all the way back to Prohibition, but specifically relate to a 1983 law. Since medical marijuana is federally illegal, those are the taxes that have to be paid…if it was federally legal, then these federal taxes wouldn’t apply. This is the problem with marijuana being federally illegal as the fed can not only arrest people for stuff like this, but do things like make there be different taxes…no amount of states legalizing marijuana can get around this.
then it’s time for us to demand a repeal of prohibition. just like they did it before.
If Monsanto has it’s way, we won’t be able to grow gardens or have farmers’ markets any longer.
This alone is sufficient reason to not vote for Obama, though there are many other good reasons.
Actually I know one of the people who was arrested as part of the Rawsome raw milk raids…and those types of FBI raids are increasingly happening under Obama.
I live in Louisiana. Medical bud is available on the black market of course but I have been asked to pay $30.00 per GRAM for it. Give you ideas? I’m happy for you but what you are doing is just as illegal as what I do. Big brother can crush you like a bug any time he wants to. I would rather live free and cultivate the very best myself and share it with pride with my friends and neighbors.
That’s why I say lets round up the authoritarians and put THEM in prison.
This is an attack on the funding of the reform movement too..
Unfortunately major funders are withholding support for the new initiatives, and the California movement has about 3 different initiatives gathering signatures.
Its always been a fractious movement, but roughly 500,000 people a year are arrested for marijuana offenses.
Thats a lot of human suffering, and a grotesque example of mass injustice that is still tolerated while the politicians of Boozer Nation guzzle and fart.
Internal Revenue Code Section 280E disallows deductions incurred in the trade or business of trafficking in controlled substances that federal law or the law of any state in which the taxpayer conducts the business prohibits.
“trafficking in controlled substances” is an interesting term since many drugs are controlled and selling is “trafficking” – so perhaps going to “suggested donation” ends the problem.
Of course the “federal law prohibits” can be solved by just getting the Feds to permit.
This company reported 22 million dollars made—they paid 5% to the State at just over a million dollars. The IRS is asking for 2.5 million—-about 13%—-That still leaves 18.5 million dollars —-How many businesses do you know that makes 18.5 million after all taxes have been paid. How much overhead could there be??? Paying a total of 18% in taxes for marijuana is not to much to ask if you ask me. The profits on marijuana are higher than any other product on the face of this earth. Who the hell you trying to kid??? 18.5 million after taxes and your talking about closing your doors??? Your a bunch of idiots.
This is really the most sane response I’ve read here. The bottom line always comes to the dollars. If the medical marijuana industry were pouring in as many tax dollars as the alcohol or pharma industries we would not even be having this discussion. If the numbers stated above are accurate then pay the 2.5 million. 13% fed tax is less than what I pay on my income and I make nowhere near 22 million. It’s a funny thing to wish to be recognized or granted the same status for something but not have the big picture understanding of how the wheels turn.
Oct 6
In a major escalation of the U.S. federal government’s war on medical marijuana dispensaries, federal prosecutors have warned California collectives they have 45 days to shut down or face criminal charges and confiscation of their property — even if they are operating legally under the state’s medical marijuana law, approved by voters in 1996.
Wonder if this might galvanize the California reform movement into greater unity and funding?
or the whole movement nationally…