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US: Medical marijuana backers rally against federal crackdown

Peter Hecht

The Sacramento Bee

Wednesday 09 Nov 2011

State Board of Equalization member Betty Yee, joining medical marijuana protesters outside the U.S. courthouse in Sacramento, today criticized a federal crackdown on cannabis businesses in California as an assault on "responsible corporate citizens" contributing to state tax coffers.

The state tax agency official also blasted a recent $2.4 million Internal Revenue Service tax penalty sought against California's largest dispensary, Oakland's Harborside Health Center, and condemned the IRS' use of federal anti-drug trafficking statutes in denying business deductions for marijuana outlets.

"Dispensaries are following regulations paying their taxes," said Yee, whose agency is estimated to collect at least $100 million in sales taxes from medical marijuana stores handling up to $1.5 billion or more in statewide transactions.

Though California requires dispensaries to pay sales tax, state law requires that they also operate as non-profits and share the costs within closed groups of registered medical marijuana patients.

But California's four U.S. attorneys broadly assert that California dispensaries are reaping huge profits in violation of both state medical marijuana law and federal law, under which all marijuana is illegal. Federal prosecutors have sent out scores of notices threatening landlords leasing to marijuana business that their properties will be seized.

"The crackdown is counter-productive. It's irrational and it's going to drive this business underground," said Yee, whose coastal Board of Equalization District serves 21 counties from Santa Barbara to Del Norte. She also assailed the IRS penalty sought against Harborside, saying the government should direct its attention "to the real tax scofflaws."

While threatening broader actions, federal prosecutors have announced criminal charges against alleged bad actors in the medical marijuana industry accused of trafficking hundreds of pounds of marijuana out of state or pocketing millions of dollars from cultivation operations for marijuana stores.

In announcing charges last month, U.S. Attorney Benjamin Wagner in Sacramento said authorities were targeting large commercial operations, not marijuana patients. He said, "Our interest in enforcing federal law is not in prosecuting seriously ill people."

But as some 200 medical marijuana advocates turned out for the courthouse rally today, they characterized federal actions as an attack on medical users and on dispensaries providing jobs to thousands of Californians.

Dan Rush, whose United Food and Commercial Workers International Union is organizing California medical marijuana workers, said federal actions could drive legitimate medical marijuana business underground and boost criminal drug operations.

"It is corporate welfare for the cartels," said Rush, whose union is pushing for an ballot initiative for statewide regulation of the medical marijuana industry in hopes of warding off federal intervention. "You're putting decent people out of work and you're forcing patients into the street."

Read more: http://www.sacbee.com/2011/11/09/4043015/medical-marijuana-backer-rally.html#ixzz1dIuvYw8l

 

 

 

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