Come on, give me some of your pots! | Border weed: How the hometown of tater tots became a cannabis capital
In business, location can be everything, and for a small Oregon town, Ontario, being next door to Boise, Idaho has its advantages. Other than being known as the place where the tater-tot was invented, Ontario is also just an hour’s drive from the largest city in Idaho, a state where even hemp-derived CBD is still illegal. That has meant a huge boon for the city’s 9 dispensaries (for 11,000 residents) as hundreds of millions of dollars flow into tax coffers thanks to the cross-border traffic.
Congress holds vote in honor of 4/20 | House Passes Marijuana Banking Bill With Bipartisan Support
Never one to pass up a symbolic moment, the House Democrats have voted to pass the SAFE banking act this past Monday. While we’ve discussed in the past why we believe this won’t be a game-changer, it will likely have some significant positive effects on the industry and it is encouraging to see the steps taken by Congress, especially as advocates wait for the anticipated Senate legalization bill from Senator Schumer.
‘Green Rush’ fails to materialize for some | After ‘Green Rush,’ Canada’s Legal Pot Suppliers Are Stumbling
New York Times
Canada, being one of the first major countries to fully legalize cannabis, was supposed to experience an economic boom as Canadians and people around the world clamored to buy Canadian cannabis. However, chronic issues of oversupply, monopoly buyers, and lack of domestic demand have led to many companies having to curtail ambitions. Many of these issues were forecast but widely ignored in the speculative land grab and capital raising frenzy. U.S. MSO’s rapid inflection towards generating profits as large state adult-use markets come online strongly suggests that the U.S. will not follow the example of its northern neighbor.
He did do that | ‘Steve Urkel’ Actor Jaleel White Launches Purple Urkle Cannabis Brand With 710 Labs
‘Steve Urkel’ actor, Jaleel White, has partnered with 710 Labs in order to launch his own Purple Urkel cannabis line. After hunting for the original cultivar strains, Mr. White was very excited for the collaboration, “To smoke the end result from such a quality pod has been surreal. I feel a little bit like Willy Wonka, the flavor came out so similar to grape candy.”
IRS targets cannabis companies | Newly released IRS documents detail efforts to collect taxes from marijuana companies under 280E
Marijuana Business Daily
Infamous bank robber Willie Sutton, upon being asked by a reporter why he robbed banks, replied: “Because that’s where the money is.”* Just so with IRS audit examiners, who were able to net over $2,700 in back taxes assessed per hour spent auditing certain cannabis businesses vs. just under $700 per hour spent elsewhere. IRS tax code section 280E, which bars cannabis businesses from taking deductions other than the cost of goods sold for tax purposes, increases the tax burden on cannabis businesses. Readers should keep in mind that prior results don’t equal future results - the audits described in these articles took place years ago at a different stage of the industry. Understanding of, and compliance with, 280E is likely much higher than when these audits took place - not to mention that the industry, in general, has become far more professionalized in terms of accounting. *No, this phrase was not said by John Dillinger, even though it’s often misattributed to him. If readers have the urge to fact-check us, we will admit that this quotation may not be properly attributed to Willie Sutton, who denied ever saying it but also happened to be well known for lying about anything and everything about his life.
Cannabis SPACs’ Cross-Border Push Threatens Tax Hit on Investors (Bloomberg). OUR TAKEAWAY: Special purpose acquisition corporations (SPACs) have been a big deal in cannabis financing as of late, but a recent report reminds us that there are downsides to the financial vehicle. Due to Obama-era anti-inversion tax rules, when a Canadian SPAC acquires more than 80% of a U.S. company, any profits that flow up to the Canadian company will be treated as U.S. income. This triggers different tax consequences for U.S. shareholders and foreign shareholders of the cannabis company.