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Have You Paid Your Sky High California Cannabis Taxes, Yet? If Not, the State is Coming for You!

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Cannabis businesses in California might be in for a tough time as the state is looking to clamp down on those with unpaid taxes. The issue of tax payment has long been a problem for both the government and the business owners over the years. However, it seems the bodies in charge are looking to take new and stringent moves to ensure compliance. Read on as we explore what this might mean on a large scale of things for cannabis business owners in the state.

Licensed and unlicensed cannabis businesses in California have ramped up about $200 million in unpaid taxes. With such an astronomical amount, it’s no surprise that the California Department of Tax and Fee Administration (CDTFA) is already beckoning with enforcement. It has not been business as usual for cannabis businesses skipping taxes as the CDTFA has embarked on new measures to checkmate them. Some of these unlicensed businesses have been shortchanging the licensed ones in the state through the underground grey market. However, the CDTFA looks set to bring the trend to an end.

The state of California and its residents have always credited the CDTFA for its productiveness and it is easy to see why. The body has launched several raids in order to put a stop to the illicit and unlicensed cannabis businesses in the state. The properties seized from such raids have also been auctioned off as a means of catering to the unpaid taxes of such businesses. This and many more are the moves being made by the body to cater to the unpaid taxes of unlicensed cannabis businesses in the state.

The body is also addressing the issue of underpayment or non-payment by licensed businesses too. There is a steady escalation of efforts aimed at ensuring compliance from the business owners. The department sees these moves as a pointer towards normalcy after the pandemic brought most things downward. In an email to MJDIZDaily, the spokesperson of CDTFA Tamma Adamek explained why the department has decided to be more firm at this time. He stated that the department is fully aware of the impact the pandemic had on many businesses and how many faced hardship. However, with the economy slowly recovering, it’s only right that the department goes back to its normal approach to enforcement.

The spokesperson also went on to say that the department knows the legal cannabis retailers because they need a permit from the body. This means that at all times, the CDTFA knows who they are, where they are, and their tax status. It makes it easier to checkmate their activities than it is to address underground grey market sellers.

As stated earlier the CDTFA has kick-started this new approach and so far it has brought back commendable results. A brief run down of some of the department’s achievements in the past three months shows just how effective they have been. The Department auctioned off a property seized in Compton for $50,000. This was the third of its kind from the department of seized properties for unlicensed businesses. Also in March, the department sold off property worth $310,000 in Whittier, east of Los Angeles after it was seized from illegal cannabis sellers. These particular operators had racked up a debt of $850,000 in unpaid taxes according to the CDTFA.

The department has partnered successfully with other government security parastatals to ensure defaulters are brought to the book. Following a raid with the Sheriff’s department of LA County, the department seized and then sold a property in Compton for $256,000. The agency has continued to work in synergy with the Highway Patrol, local and city law enforcement agencies, county licensing authorities, and so on. The outcome of this is over 1,000 inspections since 2020 leading to multiple arrests and successes. The department has recovered the equivalent of over $32 million in products and cash within that period.

Cannabis retailers in California have complained bitterly about the complexity and impact of taxes in the state on businesses. After the state legalized recreational use in January 2018, a total of $187 million has been amassed by licensed and unlicensed cannabis businesses. This has been attributed majorly to the hard tax policy on most legal businesses.

The policy for cannabis retailers is that they must get a permit from the CDTFA to sell after which they will file a return and pay tax on sales. Growers and distributors are also required to do the same for excise and cultivation taxes. These high taxes according to different analysts have led to the complete shut down of many cannabis businesses. Likewise, it has also favored black market operators who avoid such taxes and operate without regulatory requirements.

Despite the accolades and successes of the CDTFA particularly with cannabis businesses, some still have issues with the agency. A recent bust on March 1 with TLC Collective of Jungle Boys has gained much attention seeing as it is owned by a licensed owner. There was an extreme show of force as different unmarked gunmen stormed the premises and there was wide criticism of the act. Many believe such extreme shoe of aggression by the CDTFA will make more cannabis businesses apprehensive about working with them.

Bottom line

The situation of cannabis business taxing in California is one that requires a strong arm and that is what the CDTFA is doing presently. The department has gotten serious recently and its clampdown is being felt by many in the cannabis industry. Slowly the department aims to ensure compliance through enforcement alongside other agencies. With some successes already recorded, time will tell how effective the recent moves will eventually be. The effectiveness and reasonability of the tax returns will surely spell good news for the state and legal cannabis businesses.

 

CALIFORNIA CANNABIS TAXES, READ ON…

CALIFORNIA CANNABIS TAXES

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It’s Local, It’s Legal, and It’s Extortion

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Massachusetts cannabis companies have paid $50M-plus in community fees since 2018

 

Cannabis businesses based in Massachusetts towns and cities have paid more than $53 million in “impact” fees since recreational cannabis sales kicked off in the state. This is the conclusion reached by a survey carried out by Northeastern University researchers on 88 communities.

 

The survey was published by the Massachusetts Cannabis Business Association as lawmakers debate on a final bill that would compel these towns and cities to justify their actions. An action many critics call a government shakedown.

 

One of the sponsors of the legislation, state Senator Sonia Chang-Díaz affirmed that the report further proves how unequal and arbitrary the local process of approval had become. She added that she’s looking forward to a time when the cannabis marketplace meets our expectations, aspirations, and values.

 

Presently, Massachusetts state law enables communities to charge a 3% tax on cannabis sales. Communities also get to charge impact fees to a max of 3% of a firm’s yearly revenue given the fee is ‘reasonably related’ facility imposed cost. However, given the absence of state supervision, a lot of these communities charge cannabis business to the maximum percentage without quoting specific impacts.

 

Meanwhile, local officials have argued that the fees were arranged in good faith. They said the fees have gone a long way in curbing the cost of setting up cannabis regulations, managing heightened traffic, and reviewing license applications.

 

Nonetheless, the Northeastern report has brought forward new questions relating to the practice, which entrepreneurs and advocates have long criticized as a form of bribery. They believe the funds are being channeled to unrelated state projects while locking our small cannabis businesses that can’t afford to pay the fees.

 

Out of the 88 communities that claimed to have changed the impact fees as inclusive of the agreements made with the cannabis business, only 47 communities provided a public record of fees collected. This means that the $53.3 million is way less than the actual amount collected by these towns and cities.

 

The Exception: Brookline

Fall River, a city whose ex-mayor is currently serving a 6-year jail time in federal prison for receiving bribes from applicants for cannabis licenses earned $5.33 million in impact fees, more than any other city that took the survey. Although Fall River did not disclose how the money was spent.

 

Brookline, the home of NETA, one of the most successful dispensaries in the country, is the second city on the list has and received $4.9 million in fees. The total fee amounts to hundreds of thousands of dollars cannabis businesses have remitted to enforcement officials working compulsory town security details at cannabis dispensaries.

 

The city’s director of administrative services, Devon Fields, admitted that the inception of cannabis stores has led to considerable administrative costs and headaches in the neighborhood. Fields claimed the neighborhood has been impacted by various disorderly conducts including neighborhood trashing, parking, traffic, and various endowment issues. She believes the impact fees are justified and it would be a shame if the cash inflow is halted.

 

Different from other cities, Brookline diverted the funds into a separate account overseen by a community board that publishes a comprehensive account of all expenditures when due. Fields believe the town has judiciously managed the funds which have been used to kick start initiatives for racial justice and employ counselors for substance abuse cases. He also noted that the funds have helped Brooklyn push local cannabis retailers to also prioritize diversity in hiring.

 

Brookline has maintained a transparent process that everyone can see. Fields added that more oversight would be appreciated but the city does not want to be in a situation similar to Fall River. Brookline was quick to accept that legalization of legal cannabis was bound to happen, which gave the city the edge, time, and resources to make everything work.

 

Current Stance of The Massachusetts Municipal Association

As a representative of the local government, the Massachusetts Municipal Association is lobbying against the planned ban on impact fees. The association argued that the impact fees are fair and are a practical incentive for towns and cities to host cannabis facilities.

 

The executive director of the Massachusetts Municipal Association, Geoff Beckwith, affirmed in a statement that the cannabis industry is publishing another report that cares for the financial interest of its members. He believes this is an attempt to discredit agreements between host communities that had been fairly negotiated in the interest of the public.

 

Geoff believes that towns and cities should retain the power to make decisions on behalf of taxpayers and residents as regards agreements with the marijuana industry.

 

In the course of the survey only 42 cities made available their spending records to the researchers as proof of revenue disbursement. Among these cities, half claimed that the money is diverted to their general funds which are then spent on various budget items and local initiatives. This is regardless of if they were connected to the effects of growing facilities and cannabis stores. 

 

For instance, Wareham used a larger percentage of its $1.7 million impact fees to fund the latest police headquarters, while Maynard used a percentage of its $137,000 impacts fee for the construction of four park benches. Other communities claim the fees were used to fund various things like police cruisers, fire equipment, rides are programs, storm drains, and so on. 

 

However, according to Jeffrey Moyer, a professor of public policy at Northeastern University, while few of these claims are true, most of these cities are not transparent about their spending habits. The resident of the cannabis business association, David O’Brien, affirmed that many of these cities are using these impact fees mud funds with little transparency and zero accountability.

 

Just a few towns like Lee and Northampton have stopped receiving impact fees claiming cannabis businesses have been good to their neighborhood and exact several measurable costs. Meanwhile, other cities have doubled down. For instance, Haverhill is challenging a lawsuit issued by a local cannabis store disputing the impact fees.

 

 

Conclusion

As it stands, cannabis businesses are willing to cover the real impact costs they may inflict on communities. However, what’s objectionable is the compulsion to pay a flat rate fee that isn’t compelled on non-cannabis businesses with identical impacts. While there’s certainly the need for local control in towns and cities, the impact fee seems too ambiguous for comfort. It is basically legalized bribery.

 

READ MORE ON SHADY LICENSING IN CANNABIS…

CANNABIS BRIBES IN MASSACHUSETTS

THE BOSTON GLOBE LOOKS AT CANNABIS BRIBERY IN MASSACHUETTS!



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The Magic of the Entourage Effect

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How Cannabinoid Compounds and Full Spectrum Products May Offer a Therapeutic Advantage

You might have noticed the term “full spectrum” tossed around a lot in the CBD/Cannabidiol industry. So what does it mean? How can using a combination of different compounds maximize your benefits? That’s exactly what we are here to figure out!

It’s important to understand the Entourage Effect and how it works before you buy full spectrum CBD oil to make sure you choose the right product for you. To do this, you’ve got to look at what makes full spectrum, broad spectrum, and isolate products different from each other.

About Full Spectrum, Broad Spectrum, and Isolate Cannabidiol Oils

Full spectrum Cannabidiol products include numerous plant medicines that are called cannabinoids along with other phytochemical compounds found naturally in the cannabis/hemp plant. This usually includes up to 0.3% of THC. Alternatively, broad-spectrum Cannabidiol has all of these compounds, minus the THC. Isolates generally contain cannabidiol only. Whether you prefer isolates or full spectrum products is usually a matter of personal preference and tolerance. Here is a quick breakdown of the three types of Cannabidiol extracts:

Full Spectrum Cannabidiol Products

Full spectrum Cannabidiol products usually contain Cannabidiol and a range of other minor terpenes and cannabinoids naturally produced by hemp plants. In other words, the full spectrum of hemp compounds found in the cannabis plant.

Broad Spectrum Products

In contrast, broad spectrum products contain all minor cannabinoids and Cannabidiol while excluding THC. These products are ideal for those seeking max benefits but steering clear of THC itself.

Isolate Products

Isolate products contain only CBD/Cannabidiol and nothing else. These products are ideal for Cannabidiol users looking to stick to what their systems are most comfortable with and adapted to.

An Entourage of Benefits: Combining Compounds for an Enhanced Effect


This brings us to the Entourage Effect, a phrase referring to the synergistic advantages derived from all of the compounds found in hemp plants. Understand that Cannabidiol is just one advantageous cannabinoid among many. When Cannabidiol is paired with THC and other minor cannabinoids, terpenes, and flavonoids, a more robust therapeutic result is attained.

Clinical research shows full spectrum products deliver the most effective therapeutic benefits among the three types of Cannabidiol extracts. This is because terpenoids, flavonoids and cannabinoids interact with one another as they bind to the various receptors in the brain and body.

So what are the key players in this effective full spectrum entourage effect? They are Cannabinol, Cannabidiol, Cannabigerol, Cannabichromene and THC. (Remember, broad spectrum CBD oil products have everything that full spectrum products have except for THC.)

Here’s a breakdown of these compounds to give you a better understanding of how they work together to create superior entourage benefits.

Cannabidiol/CBD Oil

Cannabidiol comes from the Sativa plant. This non-intoxicating chemical produces a relaxed feeling, though does not create the “high” that some experience from THC. In fact, Cannabidiol is entirely non-psychoactive. Cannabidiol benefits include relief from anxiety, pain, depression, fibromyalgia, inflammation, and more.

Cannabigerol/CBG Oil

Cannabigerol, or, CBG is a minor cannabinoid that has numerous potential benefits identified in clinical study. CBG oil is shown to protect nerve health, support healthy brain function, relieve inflammatory bowel disease symptoms, stimulate appetite, and even lower cholesterol.

Cannabinol/CBN Oil

Cannabinol Oil (CBN) also comes from the Sativa plant. This cannabinoid is known to be mild, at around 25% as potent as THC or less. In larger doses, Cannabinol Oil may produce mild psychoactive effects. CBN Oil benefits include pain relief, immune support, insomnia relief and appetite stimulation.

Cannabichromene/CBC Oil

Cannabichromene, or CBC for short, is a non-psychoactive minor cannabinoid that is abundant in hemp. Although it is not psychoactive, it is still very powerful. This unique compound supports healthy brain function by increasing the viability of new brain cell growth. This process is known as neurogenesis, and it can help keep your brain sharp as you age. CBC may also help bind to neurological and neurotransmitter receptors. It is also thought to enhance pleasure sensation, improve motivation, regulate sleep, promote appetite, and reduce pain.

THC in Full Spectrum Cannabis Oils

THC stands for Tetrahydrocannabinol. This is the substance that produces the “high” that many people enjoy from consuming marijuana products. Full Spectrum CBD oil will contain very small amounts of THC while Broad Spectrum CBD Oil will have all of the cannabinoids listed above, minus the THC.

Cannabis Terpenes

Full spectrum Cannabidiol will also usually contain terpenes from the cannabis plant. Terpenes are resinous, fragrant chemical compounds that can be found in various plants, not just cannabis. In cannabis, they can make a certain strain taste or smell different from others. The terpene content in different cannabis strains, plants, and even fruits and vegetables varies significantly. The higher the terpene content is, the more fragrant, potent, or flavorful, things will be.

Inside the Body: How Does The Entourage Work Together?

THC, Cannabidiol, minor cannabinoids, and certain terpenes interact with your body’s very own ECS (Endocannabinoid Systems). The ECS is an internal bodily system that regulates many different biological processes ranging from appetite and memory to sleep and immune function. When you pair Cannabidiol with other compounds known to interact with your endocannabinoid systems, the effectiveness of every compound is also increased. This is the heart of the entourage effect. Think of it as a full-body workout as opposed to simply doing curls with your left arm. When you stimulate your entire ECS, the benefits you experience will be much more far reaching and robust.

Is the Entourage Effect a proven thing?

Absolutely! Science supports this effect unequivocally. Many research papers have been written describing the well-established benefits of the entourage effect. Leaders in medicinal cannabis research have conducted studies supporting the benefits of full spectrum products versus isolates as well. In these studies, the results indicated that even users who had minimal benefits from Cannabidiol isolate products could attain substantial advantages from full spectrum products.

Should I go for Full Spectrum or Broad Spectrum cannabidiol products?

When it comes to choosing between full and broad spectrum products, it will all come down to what you are looking to achieve. Do you want a healthy boost without the possibility of any psychoactive effects? If so, broad spectrum CBD products are probably the best option for you.

However, if you prefer the way that THC makes you feel and want to get the most benefits from your CBD oil right away, full spectrum is definitely worth looking into. Or, maybe you’re a purist looking to benefit from just one compound at a time. If so, isolates are an excellent option for you. You might even want to try all three Cannabidiol products types to see which one feels best for you personally. Either way, there are plenty of health benefits to be enjoyed and they are all supported by independent clinical research!

Final Thoughts

Now you know the most important facts about the three Cannabidiol product types! The next time you are deciding what products will work best, you’ll be able to buy with confidence because you know how to target the exact benefits you need. Remember, it all comes down to what you’re looking to achieve with CBD oil. Take your time and test out your options. This is your journey, after all. Before you know it, you’ll have your favorite products pegged and be on track to a healthier, calmer, and pain-free life!

 



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Medical Cannabis Enrollment Is Skyrocketing, Is It Chronic Pain Conditions or to Avoid Paying Taxes on Cannabis Products?

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Inflammation, fatigue, chronic pain, anxiety, mental disorders, seizures, high blood pressure, and management of specified disease symptoms are some of the reasons why medical cannabis is being used as an alternate treatment. Of all these, researchers and data analysts have found that chronic pain is the most common condition described by patients for medical cannabis treatment.

Within the last five years, at least ten states in the United States of America have legalized the use of medical cannabis. Canada and a few countries in Europe have also amended their federal laws to permit the application of medical cannabis in treating some conditions. This has led to hundreds of patients opting for these alternative treatments. Today, medical cannabis program enrollment is at an all-time high. The total number of applicants and patients in medical cannabis programs across the United States is at least three times as much as in 2016.

This burst in figures began during the pandemic in 2020, as many states, including New York, reported that thousands of residents had newly applied to join the program. According to a study published by Annals of Internal Medicine researchers, there are over three million legally registered medical cannabis patients.

As I write this, 37 U.S states have approved the use of medical cannabis, while 17 states have both recreational and medical cannabis programs. The new study organized by Kevin F. Boehnke, Ph.D., pointed out that the increasing numbers were reported by clusters of states with only medical cannabis legalization. In states with both medical and recreational cannabis programs, enrollment has remained the same, but in a few states, it has declined.

The study also highlighted the various conditions described by the thousands of patients in the program. Although states have varying qualifying medical conditions for patients to be accepted into the program, the study discovered that one condition was common in all 37 states.

The authors stressed the need for coherent U.S cannabis policies. They wrote that these concise policies would improve research efforts to provide better medical cannabis drugs and monitor Its use. One of the study’s conclusions that stood out was a call on the proper authorities to provide thoughtful regulatory and clinical strategies to monitor the acceptance of medical cannabis treatments.

The Kevin-led study explained that chronic pain is the most common condition itemized on medical cannabis applications irrespective of the state.  Kevin Boehnke commented that their studies sought to do what other studies didn’t, which is to separate reasons for medical cannabis enrollment instead of laying more focus on overall adult use. The Michigan University chronic pain researcher explained that before this study was done, he had always wondered about the leading cause for the massive enrollment into medical cannabis programs. He said he kept asking himself how many people were in this program due to pain. In not so many words, he said he wanted to fill that gap of information, and with this study, he has.

Boehnke assiduously began this multiple-year investigation to gather data from public state records, including meeting notes, website publications, and other documents obtained from state officials through the Freedom of Information Act. Boehnke wrote that another of his goals was to accurately determine the state of medical cannabis programs during this period when state officials and legislature are shifting to recreational cannabis as well as amending existing medical cannabis laws.

Many states are modifying their cannabis policies to include unexpected restrictions. For example, some people are no longer able to use as much medical cannabis as they would like or the way they’d like to due to the dramatic effects of amended cannabis laws. One big reason for an mmj card is due to economics, as most states do not tax medical marijuana, as opposed to heavy taxes on recreational marijuana.  If a user spends X amount per week, based on the cost of an mmj card in their area, it may be in their self interest to get a card as products will be cheaper with no heavy tax burden.

Medical Cannabis for Chronic Pain

Cannabis has become a popular alternative medicine to treat chronic pain in both young and old. This controversial plant has beneficial extracts which have helped the medical field push forward in finding remedies to a number of ailments, including chronic pain.

 

Chronic pain is more common than cancer, heart disease, and diabetes combined. It could result from inflammation or nerve damage. In the United States, chronic pain is the leading cause of long-term disability. Most of the best cannabis strains to manage chronic pain are indica strains. This help reduces the pain while leaving the user sedated or relaxed at the same time.

 

Anecdotal reports from users of medical cannabis patients claim that indica strains have helped improve their migraine and non-migraine headaches, as well as joint pains. One can only assume this claim is accurate with the increasing numbers of enrollments for medical cannabis programs.

Other Reasons for Increasing Enrollment In Medical Cannabis Programs

To manage mood disorders

Anxiety is another common condition listed by cannabis patients. Preclinical studies have shown that CBD-based cannabis drugs are more effective in treating anxiety and mood disorders like obsessive-compulsive disorders (OCD) and post-traumatic stress disorders (PTSD).

 

To lower blood pressure

In 2017, it was revealed that CBD effectively lowers the blood pressure of human users. Trials were conducted by subjecting volunteers to stress tests before and after consuming cannabis, and results showed that their resting blood pressure was reduced.

 

To prevent or manage seizures

Muscle spasms are a common qualifying condition for patients to register under medical cannabis programs in the US, UK, Canada, and Germany. Studies show that patients’ needs improve significantly when they begin this treatment. Seizure frequency reduces, and other symptoms are abated.

 

To Fight Cancer

Cancer patients use medical cannabis treatments to manage symptoms that arise from chemotherapy. Studies claim that cannabinoids are anti-carcinogenic. They can prevent cancer cell growth and also induce tumor cell death.

Cannabis has several benefits, half of which haven’t been researched or tested yet. With the results from this recent study, we hope that researchers will focus more on improving cannabis-infused drugs for chronic pain disorders and seeing as it is the most common reason for medical cannabis use. It is worth noting that cannabis has minimal side effects. Hence further research could focus on eliminating these side effects.

 

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CANNABIS AND CHRONIC PAIN CONDITIONS, WHAT YOU NEED TO KNOW!

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CANNABIS STRAINS FOR CHRONIC PAIN

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