It has been a while since I have seen news about the tax problems of medical marijuana dispensaries. The one I saw today involves a Sacramento-based pot shop by the name of Canna Care. The IRS has imposed an $873,000 penalty under a 30-year-old tax code known as “280E.” The IRS is refusing to allow standard business expenses such as those incurred for payroll and rent. This has always been the sticking point.
What makes this story a little different is that Canna Care is not the least bit interested in negotiating with the IRS. The IRS has expressed a willingness to settle for $100,000 but apparently this pot shop has morals and will not pay a dime until ordered by a judge to do so in tax court. After all, Canna Care is known as an “evangelical medical marijuana provider.” Well, this is according to the Sacramento Bee article.
When I visited the Canna Care website (www.cannacare.net) I could not verify this unique designation. In fact, many of the links on the website don’t work at all. And probably the most frustrating is a video thumbnail of “the first commercial in history to be played on … a major US television station” (which I have to believe is really meant to read “the first medical marijuana commercial in history…”). This “private video” can only be viewed with a password. I suppose if I knew we would be going to court, I would want my client to keep quiet and minimize their internet footprint for a while too.