Tag Archives: regulate

Regulate: ex-world leaders’ solution to ‘failed’ drug war

https://s2.reutersmedia.net/resources/r/?m=02&d=20180924&t=2&i=1307561780&r=LYNXNPEE8N08F&w=1280

MEXICO CITY (Reuters) – More governments should turn away from a repressive war on drugs that has “failed” and look to proven strategies to implement regulated markets for risky substances, a group of former presidents and leaders said in a report published Monday.

Since the group that includes 12 former heads of state began advocating for an end to drug prohibition in 2011, a growing number of countries and U.S. states have created medical or recreational markets for marijuana.

Now the group is looking at ways to smooth the way out of prohibition, recommending countries start regulating lower-potency drugs as well as reforms to international treaties that require prohibition and punishment.

“The international drug control system is clearly failing,” said Helen Clark, a former prime minister of New Zealand. “The health … of nations is not advanced by the current approach to drug control.”

By taking control of illegal drug markets, the report argues governments can weaken the powerful criminal gangs that have grown despite decades of efforts to stamp them out.

The report, “Regulation: The Responsible Control of Drugs” by the Global Commission on Drug Policy, will be released at an event on Monday in Mexico City.

The commission chose to launch its report in Mexico, whose criminal gangs are top suppliers of heroin, methamphetamine, cocaine and marijuana to the United States and where gang-related violence has driven murders to a record high.

“Mexico is the most important country in the fight against drugs,” said former Colombian president Cesar Gaviria.

Mexico’s recent history exemplifies the report’s claim that evidence shows arresting drug traffickers has little impact on drug supply and may increase violence.

Just over 10 years ago, Mexico intensified its battle with drug gangs by sending out the military to battle traffickers.

While dozens of kingpins have been captured or killed, the number of gangs operating in Mexico has multiplied as new criminal leaders step into the breach and battle over turf.

The commission recommends governments open participatory processes to shape reforms toward regulation.

Incoming Mexican President-elect Andres Manuel Lopez Obrador has already started to hold town-hall reviews on violence and discuss potential “amnesty” for non-violent drug traffickers and farmers. Members of his team have said Mexico will evaluate creating legal markets for marijuana as well as opium.

The report calls for a renegotiation of the international treaties that created a “repressive” strategy where drug users and low-level dealers face stiff prison sentences, but it cautions nations are far from a global consensus yet.

Canada will legalize recreational marijuana use on Oct. 17, and it recognizes it is violating treaties.

“Current drug policies are reducing neither the demand nor the supply of illegal drugs, quite the contrary, while the increasing power of organized crime is a sad reality,” writes Ruth Driefuss, the former president of Switzerland and chair of the commission.

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PDF OF REPORT IN ENGLISH VERSION

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6 Stories That Prove You Can Still Be Arrested For Growing Marijuana In Colorado

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By TNM News on October 9, 2015 Latest Headlines, Legal, News Feed

Although it may be “Legal” in some way, some operations for making your own marijuana are being targeted by both the Federal and State governments. Much like the law that you cannot make and distribute your own alcohol without the proper licensing and adhering to certain guidelines, the Marijuana industry follows suit.

Fox31 Denver Reports:

DENVER — 20,000 marijuana plants, 700 pounds of dried weed and more than 30 guns, all found right out in the open.

“You see a group of people who are actually actively engaged, farming the marijuana. So that means there are tents, cookhouses. There are irrigation systems in place. There’s a lot of pesticides,” said United States Attorney for the District of Colorado John Walsh.

The busts started Aug. 19 and spanned the state of Colorado as listed below. Six of them took place through Thursday.

Pike National Forest, Aug. 19 in the Green Mountain Area in Jefferson County. Investigation is ongoing.

Law Enforcement Officers from the U.S. Forest Service, Department of Homeland Security Investigations (HSI), Jefferson County Sheriff’s Office and the Colorado National Guard Joint Counter Drug Task Force joined together to complete an eradication of an illegal marijuana grow site in the Pike National Forest. The eradication team collected more than 3,900 plants and over 3,000 pounds of irrigation pipe, pesticides, flammable liquids, camping gear and trash.

Routt National Forest, Aug. 28, Buffalo Pass Area in Routt County, two arrested.

Law Enforcement Officers from the U.S. Forest Service, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and the Routt County Sheriff’s Office joined together to eradicate an illegal marijuana grow site located in the Buffalo Pass area, northeast of Steamboat Springs. The eradication team collected approximately 1,000 plants and removed camping gear from the site. Further, a handgun was found. Additional site clean-up of trash and other items will be ongoing by the U.S. Forest Service. Two Mexican Nationals in the country illegally were arrested.

Private Land, Sept. 1, Cotopaxi and Westcliffe in Freemont and Custer County. 20 people arrested.

A DEA-led task force executed eight search warrants in Cotopaxi and Westcliffe as part of a major drug trafficking organization investigation. Agents and officers found well over 1,000 marijuana plants, 50 pounds of dried marijuana, 28 firearms, and $25,000 in cash. The investigation and seizures resulted ultimately in the arrest of 20 individuals, many from Cuba, acting in an organized manner according to investigators. Those arrested were growing the marijuana in Cotopaxi and Westcliffe, and then either driving or using UPS to get it to Florida.

San Isabel National Forest, Sept. 7, Cordova Pass Area northwest of Trinidad in Huerfano County, two arrested.

Hunters discovered an illegal marijuana grow site located in the Cordova Pass area approximately 40 miles northwest of Trinidad. The eradication team collected more than 11,700 plants as well as irrigation pipe, pesticides, flammable liquids, camping gear and trash. The U.S. Forest Service and Huerfano County Sheriff’s Office are working together to identify the individuals. The cultivation site spread across 10 acres with some of the growing areas above 10,000 feet in elevation. The overall grow area included a kitchen structure, three sleeping areas and a rifle. Two men were arrested at one of the campsites within the cultivation area.

Bureau of Land Management land, Sept. 15, along the Dolores River corridor between Gateway and Naturita in Montrose County, four arrested.

BLM Rangers discovered more than 1,200 fully mature marijuana plants, many exceeding six feet tall, along with 211 kilograms of dried marijuana and a rifle. Because of the size of the operation, officers spent two-and-a-half days eradicating and removing the plants. The rangers arrested four Mexican nationals who were on-scene and believed to be working the grow site.

Bureau of Land Management land, September 30, also along the Dolores River corridor between Gateway and Naturita in Montrose County, six arrested.

Law enforcement officers identified a marijuana grow site, also along the Dolores River. Evidence of at least 1,000 marijuana plants appeared recently harvested with approximately 69.6 kilograms of processed marijuana still on site. The rangers arrested one Honduran and five Mexican nationals at or near the site.

“We think this is being grown in Colorado to be shipped all around the United States to states where it’s not legal,” said Walsh.

Some grows discovered by hikers and hunters, others uncovered by law enforcement. Walsh calls operations like these a multifaceted problem.

“A major concern is this marijuana is worth a lot of money and there may be violence in connection with protecting it. It’s causing Colorado to be a source state for marijuana for other states that don`t want our marijuana. Its creating environmental damage in our mountains. Its creating safety problems in our mountains,” Walsh said.

32 people are now in custody in connection with these illegal operations

Some face up to life in prison.

Walsh has one message for anyone who thinks because weed is now legal in the state, they can just come in and grow it.

“You are not going to stay long in Colorado because you are going to be in a Federal prison somewhere,” he said.

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Big Court Defeat For Marijuana Despite Record Tax Harvests

 

 

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Should marijuana businesses pay tax on gross profits or net profits? It sounds like a silly question. Virtually every business in every country pays tax only on net profits, after expenses. But the topsy-turvy rules for marijuana seem to defy logic. And taxes are clearly a big topic these days under both federal and burgeoning state law.

Many observers and legislators suggested that legalizing marijuana would mean huge tax revenues. With legalized medical marijuana now giving way to more and more states legalizing recreational use, the cash hauls look ever more alluring. Washington state regulators say the state collected $65 million in first-year taxes from recreational marijuana sales in just 12 months on cannabis sales of over $260 million from June 2014 to June 2015. In Colorado, the governor’s office estimated that it would collect $100 million in taxes from the first year of recreational marijuana.

In the end, Colorado’s 2014 tax haul for recreational marijuana was $44 million, causing some to say that Colorado’s marijuana money is going up in smoke. Still, that isn’t bad for the first year. Colorado was first to regulate marijuana production and sale, so other governments are watching. Colorado also collected sales tax on medical marijuana and various fees, for a total of about $76 million. Still, not all sales are going through legal channels.

Now, in another blow to the budding industry, is the IRS has convinced the influential Ninth Circuit Court of Appeals that marijuana dispensaries cannot deduct business expenses, must pay taxes on 100% of their gross income. The case, Olive v. Commissioner, was an appeal from a U.S. Tax Court decision. Martin Olive sold medical marijuana at the Vapor Room, using vaporizers so patients do not even have to smoke.

But even good records won’t make vaporizers or drug paraphernalia deductible. The Ninth Circuit upheld the Tax Court ruling that §280E prevents legal medical marijuana dispensaries from deducting ordinary and necessary business expenses. Under federal tax law, the Vapor Room is a trade or business that is trafficking in controlled substances prohibited by federal law.

Indeed, the New York Times had stressed that legal marijuana faces another federal hurdle when it comes to taxes. The problem is major, for federal law trumps state law. Even legal medical marijuana businesses continue to have big federal income tax problems. It is a classic Catch 22–tax evasion if they don’t report, and a risk of criminal prosecution if they do. More imminent, though, is the risk of being bankrupted by their IRS tax bill.

On the question whether marijuana businesses should pay tax on their net or gross profits, the tax code says the latter. Indeed, Section 280E of the tax code denies even legal dispensaries tax deductions, because marijuana remains a federal controlled substance. The IRS says it has no choice but to enforce the tax code.
One common answer to this dilemma is for dispensaries to deduct expenses from other businesses distinct from dispensing marijuana. If a dispensary sells marijuana and is in the separate business of care-giving, for example, the care-giving expenses are deductible. If only 10% of the premises is used to dispense marijuana, most of the rent is deductible. Good record-keeping is essential, but there is only so far one can go. For example, in the case of the Vapor Room and Martin Olive, with only one business, the courts ruled that Section 280E precluded Mr. Olive’s deductions.

Recently, the IRS issued guidance about how taxpayers “trafficking in a Schedule I or Schedule II controlled substances”—by which the IRS means Marijuana dealers–can determine their cost of goods sold. After all, you have to report your profit, but how do you do that? If you buy goods for $10 and resell them for $20, your profit is $10. Your cost of goods sold is $10.

The IRS guidance (ILM 201504011) is complex, but tries to answer how dealers can determine cost of goods sold, as well as whether the IRS auditing a dealer can make them change. There is considerable tax history in the IRS missive. The IRS is clear that you can deduct only what the tax law allows you to deduct. The trouble started in 1982, when Congress enacted § 280E. It prohibits deductions, but not for cost of goods sold.

Most businesses don’t want to capitalize costs, since claiming an immediate deduction is easier and faster. In the case of marijuana businesses, the incentive is the reverse. So the IRS says it is policing the line between the costs that are part of selling the drugs and others.

Sure, deduct wages, rents, and repair expenses attributable to production activities. They are part of the cost of goods sold. But don’t deduct wages, rents, or repair expenses attributable to general business activities or marketing activities that are not part of cost of goods sold.

2013′s proposed Marijuana Tax Equity Act would end the federal prohibition on marijuana and allow it to be taxed–at a whopping 50%. The bill would impose a 50% excise tax on cannabis sales, plus an annual occupational tax on workers in the field of legal marijuana. Incredibly, though, with what currently amounts to a tax on gross revenues with deductions being disallowed by Section 280E, perhaps it would be an improvement. More recently, Rep. Jared Polis (D-Co.) and Rep. Earl Blumenauer (D-Or.) have suggested a phased 10% rate here, ramping up to 25% in five years.

For alerts to future tax articles, follow me on Forbes. You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

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Study: Arrests For Marijuana Offenses Increasing In Many States –

by Paul Armentano, NORML Deputy Director July 30, 2014

 

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Law enforcement in many states are making a greater number of marijuana arrests than ever before despite polling data showing that the majority of Americans believe that the adult use of the plant ought to be legal.

According to a just published report, “Marijuana in the States 2012: Analysis and Detailed Data on Marijuana Use and Arrests,” which appears on the newly launched RegulatingCannabis.com website, police made an estimated 750,000 arrests for marijuana violations in 2012 – a 110 percent increase in annual arrests since 1991. Yet, despite this doubling in annual marijuana arrests over the past two decades, there has not been any significant reduction in marijuana consumption in the United States the report found.

In 2012, marijuana arrests accounted for almost half (48.3 percent) of all drug arrests nationwide. Marijuana arrests accounted for two-thirds of more of all drug arrests in five states: Nebraska (74.1 percent), New Hampshire (72 percent), Montana (70.3 percent), Wyoming (68.7 percent) and Wisconsin (67.1 percent).

From 2008 to 2012, seventeen state-level jurisdictions experienced an average annual increase in marijuana arrests, the report found. South Carolina (11.6 percent) and the District of Columbia (7.7 percent) experienced the highest overall percentage increase in arrests during this time period. By contrast, annual marijuana arrests fell nationwide by an average of 3.3 percent from 2008 to 2012.

Overall, the study reported that the five state-level jurisdictions possessing the highest arrest rates for marijuana offenses are the District to Columbia (729 arrests per 100,000 citizens), New York (577), Louisiana (451), Illinois (447) and Nebraska (421). District of Columbia lawmakers decriminalized the adult possession of marijuana earlier this month.

The two states possessing the lowest marijuana arrest rates are California and Massachusetts, the report found. Both states decriminalized marijuana possession offenses in recent years.

Stated the report’s author, Shenondoah University professor Jon Gettman, “After a generation of marijuana arrests, nearly 19 million and counting since 1981, the results are that marijuana remains widely used, not perceived as risky by a majority of the population, and widely available. The tremendous variance in use and arrests at the state level demonstrate why marijuana prohibition has failed and is not a viable national policy.”

Full text of the report is available on the NORML website here or from: RegulatingCannabis.com.

– See more at: http://blog.norml.org/2014/07/30/study-arrests-for-marijuana-offenses-increasing-in-many-states/#sthash.l9sfun7e.MOcw3eNJ.dpuf