Cannabis News
The US Cannabis Industry is Booming If You Don’t Count the $3,800,000,000 Owed in Back Taxes and IOUs
Published
7 months agoon
By
admin
The cannabis industry is great at not paying their bills.
If you remember the video that went viral for the dispensary owner saying the key to making money is not paying your vendors, and just let them go out of business.
In Canada, the Canadian government is cancelling 123 cannabis licenses over upaid taxes, and what they view as “uncollectible” debt.
In California, the state has created a “cannabis company deadbeat” list of entities that owe licensing and tax money to the state and can’t pay their debts.
In the US, total delinquent payments cannabis operators have exceeded $3.8 billion and could balloon to $4.2 billion in 2024 without some intervention. The problem stems, in part, from poor cash-flow management and the heavy tax burden of Section 280E, according to a report by Oregon-based Whitney Economics.
“The pressures created by current macroeconomic factors and regulatory policies have incentivized operators to stop paying their suppliers,” Whitney founder Beau Whitney said in a statement.
“This data further affirms the fact that the cannabis industry is struggling.
“Unless there is some form of federal and state regulatory intervention, the issues associated with the lack of payments will only worsen.”
An unknown number of respondents to a poll discovered that:
Delinquent payments mainly affect cannabis producers, while sellers get the fewest complaints.
Delinquent payments are harming the sector as a whole, but smaller and minority-owned enterprises are most severely affected.
Delinquent receivables were cited by 44% of respondents as making it more difficult to service debt, and by 34% as affecting their capacity to pay taxes.
Section 280E of the Internal Revenue Code, which prohibits cannabis operators from deducting business expenditures since marijuana is still illegal at the federal level, is perceived by 57.3% of survey respondents as having a higher impact on their marijuana business than outstanding accounts receivable.
California operators have been especially vocal about the delinquent payment problem.
A group of marijuana businesses in the state hired a credit association in May 2023 to try to recoup hundreds of thousands of dollars owed
Impact on Sector Dynamics: Cannabis Producers Bear Brunt of Delinquent Payments
Producers of cannabis bear a disproportionate amount of the burden of past-due payments in the sector. These companies, who grow and distribute cannabis goods, are severely impacted financially when customers fail to pay on time or at all. Their failure to receive product sales on time puts them in danger of not being able to pay for utilities and salaries, buy necessary supplies, and keep up with operations.
Cannabis growers are the industry’s backbone, delivering a consistent supply of goods to merchants and consumers. However, the consequences of payment delinquency impede the regular operation of their businesses. Aside from immediate financial worries, protracted payment delays limit manufacturers’ capacity to invest in expansion, R&D, and compliance measures required for long-term viability in a highly regulated industry.
In addition, the difficulties faced by cannabis growers go beyond simple budgetary limitations; they also affect the way they interact with suppliers and other players in the industry. These vital collaborations are strained by past-due payments, which might affect customers’ access to and satisfaction with cannabis goods. To preserve the integrity and stability of the whole cannabis sector ecosystem, the issue of payment delinquency among cannabis producers must be addressed.
Smaller and Minority-Owned Businesses Hit Hardest by Payment Delinquency
Smaller and minority-owned firms suffer the brunt of the cannabis industry’s financial delinquencies. These businesses, which frequently lack the financial reserves and credit access of bigger counterparts, are particularly vulnerable when payments are delayed or withheld. The gap in resources exacerbates the impact of late payments, increasing the financial hardship and operational issues that small enterprises face.
The cascading impacts of payment delays are more likely to affect smaller and minority-owned firms, even if bigger cannabis operations may be better equipped to withstand financial turbulence. The impact of non-payment on these businesses’ bottom lines is exacerbated by the fact that for many of them, unpaid receivables account for a sizeable amount of their income. Payment delinquency thus jeopardizes these companies’ survival and development prospects and makes it more difficult for them to compete in a market that is already fiercely competitive.
The need for focused interventions and support systems within the cannabis sector is highlighted by the disproportionate impact that payment delinquency has on smaller and minority-owned firms. It is imperative to tackle the structural obstacles that impede financial stability and provide fair opportunities for all parties involved in order to advance diversity, inclusivity, and resilience in the cannabis industry. A more inclusive and sustainable business environment may be created by stakeholders by giving these vulnerable enterprises’ demands priority.
Survey Reveals Challenges in Servicing Debt and Meeting Tax Obligations
A survey of cannabis sector participants reveals the significant financial hardship caused by payment delinquencies. Respondents identified the difficulties of servicing debts owing to pending receivables, with 44% rating this as a serious obstacle. The failure to collect payments on time not only disrupts day-to-day operations but also impedes long-term financial planning and growth goals for firms throughout the industry.
Furthermore, the survey results highlight how the cannabis industry’s ability to satisfy its tax responsibilities is impacted by payment delinquency. Of those surveyed, 34% said they were worried about their ability to pay taxes because they had unpaid receivables. In addition to the significant tax cost imposed by Section 280E, this simultaneous financial strain creates significant obstacles for cannabis firms trying to stay legal while navigating intricate regulatory frameworks and market dynamics.
The prevalence of these financial challenges highlights the urgent need for comprehensive solutions to address payment delinquency within the cannabis industry. Without timely intervention, businesses may face heightened risk of financial instability, regulatory scrutiny, and operational disruptions. Recognizing the critical role of financial stability in fostering industry growth and sustainability, stakeholders must collaborate to develop strategies that mitigate the adverse effects of payment delinquency and promote a more resilient and prosperous cannabis ecosystem.
Bottom Line
The burgeoning problem of delinquent payments within the U.S. cannabis industry, exceeding $3.8 billion and potentially ballooning further, underscores the urgent need for intervention. Stemming from issues such as poor cash-flow management and the burdensome tax regulations of Section 280E, this predicament disproportionately affects cannabis producers, especially smaller and minority-owned businesses, exacerbating financial strain and impeding operational stability. Survey findings reveal widespread challenges in servicing debts and meeting tax obligations, emphasizing the necessity for collaborative efforts among regulatory bodies and industry stakeholders to implement targeted solutions. Failure to address these issues not only jeopardizes individual business viability but also undermines the integrity and sustainability of the entire cannabis ecosystem, highlighting the imperative for proactive measures to foster inclusivity, resilience, and compliance within the industry.
IS THE CANNABIS INDUSTRY A PONZI SCHEME? READ ON…
IS THE CANNABIS INDUSTRY A PONZI SCHEME IF NO ONE PAYS THEIR BILLS?
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Latest Trump Weed Rumor – Trump Will Federally Deschedule and Decriminalize Cannabis, but Not Legalize It
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November 14, 2024By
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In a recent interview, former New Jersey Governor Chris Christie made headlines by asserting that President-elect Donald Trump will pursue significant reforms in federal policies regarding marijuana and cryptocurrency. As the nation grapples with evolving attitudes toward cannabis and the burgeoning digital currency market, Christie’s predictions have ignited discussions about the potential implications of such changes on both industries. This article delves into Christie’s insights, the current state of marijuana and cryptocurrency regulations, and the broader implications of these anticipated reforms.
The Current Landscape of Marijuana Legislation
Federal vs. State Laws
Marijuana remains classified as a Schedule I substance under the Controlled Substances Act (CSA), which places it in the same category as heroin and LSD. This classification has created a complex legal landscape where states have moved to legalize cannabis for medical and recreational use, while federal law continues to impose strict prohibitions. As of now, over 30 states have legalized marijuana in some form, leading to a burgeoning industry that generates billions in revenue.
Challenges Faced by the Cannabis Industry
Despite its legality in many states, the cannabis industry faces significant hurdles due to federal restrictions. These challenges include:
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Banking Access: Many banks are hesitant to work with cannabis businesses due to fear of federal repercussions, forcing these businesses to operate largely in cash.
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Taxation Issues: The IRS enforces Section 280E of the tax code, which prohibits businesses engaged in illegal activities from deducting normal business expenses, leading to disproportionately high tax burdens for cannabis companies.
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Interstate Commerce: The lack of federal legalization prevents cannabis businesses from operating across state lines, limiting their growth potential.
Chris Christie’s Perspective on Marijuana Reform
Christie, a former presidential candidate known for his tough stance on drugs during his tenure as governor, has evolved his views on marijuana over the years. In his recent statements, he emphasized that Trump is likely to pursue descheduling cannabis, which would remove it from the Schedule I classification. This move would not only provide clarity for businesses operating in legal markets but also open avenues for banking and investment.
Christie highlighted that descheduling would allow for a more regulated market where safety standards could be established, thus protecting consumers. He believes that this approach aligns with a growing consensus among Americans who support legalization and recognize the potential benefits of cannabis use for both medical and recreational purposes.
The Future of Cryptocurrency Regulation = The Rise of Cryptocurrencies
Cryptocurrencies have surged in popularity over the past decade, with Bitcoin leading the charge as the first decentralized digital currency. The market has expanded to include thousands of alternative coins (altcoins), each with unique features and use cases. As cryptocurrencies gain traction among investors and consumers alike, regulatory scrutiny has intensified.
Current Regulatory Challenges
The cryptocurrency market faces several regulatory challenges that hinder its growth and adoption:
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Lack of Clarity: Regulatory frameworks vary significantly across states and countries, creating confusion for investors and businesses.
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Fraud and Scams: The rapid growth of cryptocurrencies has led to an increase in fraudulent schemes targeting unsuspecting investors.
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Consumer Protection: Without clear regulations, consumers are often left vulnerable to risks associated with volatile markets.
Christie’s Vision for Crypto Regulation
Christie believes that under Trump’s leadership, there will be an effort to find a “sweet spot” for cryptocurrency regulation balancing innovation with consumer protection. He argues that overly stringent regulations could stifle growth in this emerging sector while too little oversight could expose consumers to significant risks.
In his view, a balanced regulatory framework would include:
1. Clear Definitions: Establishing clear definitions for different types of cryptocurrencies and tokens to differentiate between securities and utility tokens.
2. Consumer Protections: Implementing measures to protect investors from fraud while promoting transparency within the market.
3. Encouraging Innovation: Creating an environment conducive to innovation by allowing startups to thrive without excessive regulatory burdens.
Christie’s insights reflect a growing recognition among policymakers that cryptocurrencies are here to stay and that appropriate regulations are necessary to foster growth while safeguarding consumers.
Implications of Proposed Reforms
Economic Impact
The potential reforms proposed by Christie could have far-reaching economic implications:
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Job Creation: Legalizing marijuana at the federal level could lead to significant job creation within the cannabis industry—from cultivation and production to retail sales.
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Investment Opportunities: Descheduling cannabis would open up investment opportunities for institutional investors who have been hesitant due to federal restrictions.
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Boosting Local Economies: Legal cannabis markets have proven beneficial for local economies through increased tax revenues and job creation.
Similarly, clear regulations around cryptocurrencies could stimulate investment in blockchain technology and related industries, fostering innovation and economic growth.
Social Justice Considerations
Both marijuana legalization and sensible cryptocurrency regulations have social justice implications:
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Addressing Past Injustices: Legalizing marijuana could help rectify past injustices related to drug enforcement policies that disproportionately affected marginalized communities.
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Financial Inclusion: Cryptocurrencies offer opportunities for financial inclusion for those underserved by traditional banking systems, particularly in low-income communities.
Political Landscape
The political landscape surrounding these issues is complex. While there is bipartisan support for marijuana reform among certain lawmakers, challenges remain in overcoming entrenched opposition. Similarly, cryptocurrency regulation has garnered attention from both sides of the aisle but requires collaboration to establish effective frameworks.
Conclusion
Chris Christie’s predictions about President-elect Donald Trump’s approach to federal marijuana descheduling and cryptocurrency regulation suggest a potential shift in U.S. policy that could significantly reshape both industries. As public opinion evolves on these issues, lawmakers have an opportunity to enact meaningful reforms that promote economic growth while ensuring consumer protection. The anticipated changes could foster a more robust cannabis industry that contributes positively to the economy and addresses social justice concerns, while clear regulatory frameworks for cryptocurrencies could encourage innovation and protect consumers in the digital economy. Stakeholders in both sectors are closely watching these developments, eager to see how potential reforms might impact their futures. While the realization of Christie’s predictions remains uncertain, it’s clear that the conversation around marijuana and cryptocurrency regulation is ongoing and far from settled.
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Cannabis News
Webinar Replay: Post-Election Cannabis Wrap – Smoke ’em if You’ve Got ’em
Published
1 day agoon
November 13, 2024By
admin
On Thursday, November 7th, Vince Sliwoski, Aaron Pelley and Fred Rocafort held a post election discussion “Post-Election Cannabis Wrap – Smoke ’em if You’ve Got ’em”. Watch the replay!
Key Takeaways from the “Smoke ’em if You’ve Got ’em – 2024 Post Election Cannabis Wrap” Webinar:
- Panelists:
- Vince Sliwoski: Oregon Business lawyer specializing in cannabis and commercial real estate.
- Aaron Pelley: Experienced in cannabis law since Washington’s legalization in 2012.
- Fred Rocafort: Trademark attorney working closely with the cannabis team.
- Election Results Overview:
- Most 2024 cannabis ballot measures did not pass.
- Florida, South Dakota, and North Dakota saw failures.
- Nebraska became the 39th state to legalize cannabis for medical use when it passed two cannabis initiatives, Initiatives 437 and 438.
- Federal and State-Level Developments:
- Medical use is currently legal in 38 states, and 24 states allow recreational use.
- Republican support for marijuana legalization is growing.
- Federal Policy Implications:
- Schedule III Rescheduling: The process to move cannabis to Schedule III is ongoing, which could significantly impact the industry.
- Importance of Federal Appointments: The future of cannabis policy depends heavily on who is appointed to key positions in the administration.
- International and Domestic Trade:
- Schedule III status could ease import/export restrictions on cannabis.
- Unified control of House, Senate, and presidency might expedite legislative progress.
- Economic and Industry Impact:
- Cannabis stocks experienced volatility post-election, reflecting investor uncertainty.
- Federal legalization and banking reforms are crucial for industry stability and growth.
- Future Outlook:
- The potential for federal rescheduling remains strong, with hearings scheduled for early 2025.
- State-level initiatives and regulatory developments will continue to shape the industry.
“How Long Does One Puff of Weed Stay in Your System?”… This topic can be difficult to answer since it is dependent on elements such as the size of the hit and what constitutes a “one hit.” If you take a large bong pull then cough, it might linger in your system for 5-7 days. A moderate dose from a joint can last 3-5 days, whereas a few hits from a vaporizer may last 1-3 days.
The length of time that marijuana stays in the body varies based on a number of factors, including metabolism, THC levels, frequency of use, and hydration.
Delta-9-tetrahydrocannabinol, or THC, is the primary psychoactive component of cannabis. THC and its metabolites, which remain in your body long after the effects have subsided, are detected by drug tests.
Since these metabolites are fat-soluble, they cling to bodily fat molecules. They could thus take a while to fully pass through your system, particularly if your body fat percentage is higher.
THC is absorbed by tissues and organs (including the brain, heart, and fat) and converted by the liver into chemicals such as 11-hydroxy-THC and carboxy-THC. Cannabis is eliminated in feces at a rate of around 65%, while urine accounts for 20%. The leftover amount might be kept within the body.
THC deposited in bodily tissues ultimately re-enters the circulation and is processed by the liver. For frequent users, THC accumulates in fatty tissues quicker than it can be removed, thus it may be detectable in drug tests for days or weeks following consumption.
The detection time varies according to the amount and frequency of cannabis usage. Higher dosages and regular usage result in longer detection times.
The type of drug test also affects detection windows. Blood and saliva tests typically detect cannabis metabolites for shorter periods, while urine and hair samples can reveal use for weeks or even months. In some cases, hair tests have detected cannabis use over 90 days after consumption.
Detection Windows for Various Cannabis Drug Tests
Urine Tests
Among all drug tests, urine testing is the most commonly used method for screening for drug use in an individual.
Detection times vary, but a 2017 review suggests the following windows for cannabis in urine after last use:
– Single-use (e.g., one joint): up to 3 days
– Moderate use (around 4 times a week): 5–7 days
– Chronic use (daily): 10–15 days
– Chronic heavy use (multiple times daily): over 30 days
Blood Tests
Blood tests generally detect recent cannabis use, typically within 2–12 hours after consumption. However, in cases of heavy use, cannabis has been detected up to 30 days later. Chronic heavy use can extend the detection period in the bloodstream.
Saliva Tests
THC can enter saliva through secondhand cannabis smoke, but THC metabolites are only present if you’ve personally smoked or ingested cannabis.
Saliva testing has a short detection window and can sometimes identify cannabis use on the same day. A 2020 review found that THC was detectable in the saliva of frequent users for up to 72 hours after use, and it may remain in saliva longer than in blood following recent use.
In areas where cannabis is illegal, saliva testing is often used for roadside screenings.
Hair Tests
Hair follicle tests can detect cannabis use for up to 90 days. After use, cannabinoids reach the hair follicles through small blood vessels and from sebum and sweat surrounding the hair.
Hair grows at approximately 0.5 inches per month, so a 1.5-inch segment of hair close to the scalp can reveal cannabis use over the past three months.
Factors Affecting THC and Metabolite Retention
The length of time THC and its metabolites stay in your system depends on various factors. Some, like body mass index (BMI) and metabolic rate, relate to individual body processing, not the drug itself.
Other factors are specific to cannabis use, including:
– Dosage: How much you consume
– Frequency: How often you use cannabis
– Method of consumption: Smoking, dabbing, edibles, or sublingual
– THC potency: Higher potency can extend detection time
Higher doses and more frequent use generally extend THC retention. Cannabis consumed orally may remain in the system slightly longer than smoked cannabis, and stronger cannabis strains, higher in THC, may also stay detectable for a longer period.
How Quickly Do the Effects of Cannabis Set In?
When smoking cannabis, effects appear almost immediately, while ingested cannabis may take 1–3 hours to peak.
The psychoactive component THC produces a “high” with common effects such as:
– Altered senses, including perception of time
– Mood changes
– Difficulty with thinking and problem-solving
– Impaired memory
Other short-term effects can include:
– Anxiety and confusion
– Decreased coordination
– Dry mouth and eyes
– Nausea or lightheadedness
– Trouble focusing
– Increased appetite
– Rapid heart rate
– Restlessness and sleepiness
In rare cases, high doses may lead to hallucinations, delusions, or acute psychosis.
Regular cannabis use may have additional mental and physical effects. While research is ongoing, cannabis use may increase the risk of:
– Cognitive issues like memory loss
– Cardiovascular problems including heart disease and stroke
– Respiratory illnesses such as bronchitis or lung infections
– Mood disorders like depression and anxiety
Cannabis use during pregnancy can negatively impact fetal growth and development.
Duration of Effects
Short-term effects generally taper off within 1–3 hours, but for chronic users, some long-term effects may last days, weeks, or even months. Certain effects may even be permanent.
Bottom Line
The amount of time that cannabis remains in your system following a single use varies greatly depending on individual characteristics such as body fat, metabolism, frequency of use, and mode of intake. Frequent users may maintain traces of THC for weeks, whereas infrequent users may test positive for as little as a few days. Hair tests can disclose usage for up to 90 days, while blood and saliva tests identify more recent use. Urine tests are the most popular and have varying detection durations. The duration that THC and its metabolites are detectable will ultimately depend on a number of factors, including dose, strength, and individual body chemistry.
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