December 3, 2020 11:30 am ETEstimated Read Time: 5 Minutes
Cannabis and the IRS are two words that when used in the same sentence that can lead to anxiety, headaches, depression, and more. If you work in the cannabis industry, you probably know that most interactions you have with the IRS will lead to you needing medical cannabis attention. The IRS and cannabis is a very touchy subject.
The Internal Revenue Service is operated by the federal government. Cannabis businesses are not allowed to advertise like traditional businesses using billboards, television, and other conventional means of marketing and advertising. They are restricted in many other ways as well too. Just like any other legal business, though, cannabis businesses are still required to pay a federal tax. This is where the issues start to arise. How can the federal government say that cannabis is against the law and deem it federally illegal yet still collect taxes on it from state-legal markets?
Cannabis businesses also are one of the heaviest taxed sectors in the United States of America. You would think substances with a proven track record of death, addiction, sickness, and harm such as alcohol, tobacco, or pharmaceuticals would fall under a heavy tax, yet that are marketed and sold at cheap prices around every corner. Cannabis has many different medical applications. The agricultural aspects of this widely misunderstood plant are immense as well. There is also a huge industrial and commercial market for cannabis. In short, the plant has many different ways of benefiting society and the planet. The one thing that seems to be standing in the way of this is the United States federal government and a few handfuls of draconian elected officials still supporting outdated views of prohibition and reefer madness from yesteryear.
Cannabis Taxes and the IRS
When it comes time to pay your taxes as a cannabis business, you better get ready to have a lot of cash on hand. In true style representing that of something out of an Italian mobster movie, men in suits will show up at your door to collect your cash-only payment to the U.S. government. Many people believe since the United States federal government still supports cannabis prohibition, they should not have any right to collect federal taxes. It would seem that this could be argued in a court of law, and most likely, it will have to be done that way for this issue to ever be resolved.
Beyond the IRS coming in yearly with their muscle to swoop up your hard-earned cash at a rate higher than any other legal business in America, they also believe they have the right to investigate you as a cannabis business.
IRS Investigates Cannabis Companies and CO Court Allows It
Currently, a few companies in Colorado are going through issues with the IRS. The Internal Revenue Service has been investigating companies like The Green Solution that is based out of Denver, Colorado. This company has been going through an IRS audit since the 2013/14 tax year ended. Companies being investigated by the IRS are claiming this government agency is misusing its authority in an effort to collect information about consumers to share with the feds. With the feds having the view they do towards cannabis, I say they should stay away, and the State of Colorado should enforce the protection of laws they passed. We all knew this was going to be an issue so let’s get it out in the open. Here is what the feds had to say about some cannabis businesses in Colorado.
Apply For Your Medical Marijuana Card Today
Veriheal has satisfied hundreds of thousands of patients nationwide
Get approved or your money back
Appointments available on-demand
Customer support available 24/7
“There is nothing to uncover. Petitioners sell marijuana to the public. Medicinal Wellness Center promotes itself as ‘a full-service marijuana superstore’ [and] Medicinal Oasis claims to have the ‘largest selection of cannabis in the world!’ If the federal government someday elected to pursue prosecution of petitioners under the Controlled Substances Act, a visit to their websites, stores, or superstores (as the case may be) would almost certainly provide an ample basis to begin an investigation.”
What About the Fourth Amendment?
Do you think the IRS has the right to go over a business’s records and obtain information about you? Judge Gregory A. Phillips does. He said that “Because the Taxpayers have no Fourth Amendment right at stake, the IRS need not obtain a warrant supported by probable cause to get the records.” For those of us not fluent in our Amendments, the Fourth Amendment of the U.S. Constitution states that,
“[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
What a mess. Do you trust the government with this? Do you trust them with your personal information when it’s pretty evident that they can’t even keep up with their own? Do you think the IRS should have the right to investigate cannabis businesses while cannabis remains against the law at a federal level?
Ashley Priest is a patient, mother, entrepreneur, and activist that fights to end prohibition globally for a better future for all. Ashley has a passion for sharing education pertaining to the goddess plant known as cannabis. She believes that a single seed can tip the scales and that together through education we can end the stigma that is preventing cannabis from flowering to its full potential globally.
Blunts: What are they exactly, and how do they affect your body? If you’re interested in smoking blunts—or already smoke them—this guide is for you. We’ll cover everything you need to know about this popular cannabis intake method, including how they’re made, how they differ from spliffs and joints, risks of use, and alternative intake…
“Stoned,” “high,” “tripping,” and “baked,” are all terms engrained in the cannabis community. These metaphorical descriptions contribute to how we perceive, interpret, and learn from the experiences produced by cannabis consumption. Cannabis experiences, of course, are unique and highly variable. Specific plant strains, the presence of other cannabinoids, different delivery methods, and a user’s individual…
Cannabis seeds, aka beans, come in a lot of different varieties. On top of countless different strains to choose from, there are regular cannabis seeds, feminized cannabis seeds, auto-flowering cannabis seeds, and ruderalis cannabis seeds. Ruderalis cannabis seeds are the least common out of the group, generally only used by breeders. Regular cannabis seeds produce…
With fall well underway, many growers are getting ready to harvest their cannabis cards. When it comes to harvests, you better have a plan ready, or things will get really hectic real quick. Thankfully, this doesn’t have to be. With a little due diligence and some planning, you can make harvesting your outdoor cannabis plants…
As more states move toward legalization, accurately detecting impaired driving is of the utmost importance. Field Sobriety Tests (FSTs) have long been the go-to method for law enforcement to assess driver impairment caused by substances like alcohol. However, a recent 2023 study published in JAMA Psychiatry raises serious questions about the accuracy of these tests…
The statements made regarding cannabis products on this website have not been evaluated by the Food and Drug Administration (FDA). Cannabis is not an FDA-approved substance and is still illegal under federal law. The information provided on this website is intended for educational purposes only and is not intended to diagnose, treat, cure, or prevent any disease. It is not intended as medical advice and should not be considered as a substitute for advice from a healthcare professional. We strongly recommend that you consult with a physician or other qualified healthcare provider before using any cannabis products. The use of any information provided on this website is solely at your own risk.