Investors Beware: Taxes on Pot Investments Subject to Tax Discrimination


By Richard Farrell

As the legal marijuana bubble continues to expand, a once-secret industry is out in the open and wearing a business suit. As fancy retail outlets open, shop fitters and legal advisors are reporting in in droves. Whether this is good or bad for weed’s risqué reputation is an interesting topic to debate. Or will a new corporate brand of customer replace the hippy generation.

The Huffington was its best this morning with a post entitled, “The Feds Won’t Legitimize Pot, But They’ll Still Tax The Hell Out Of It”. Under the current deal, marijuana traders may not deduct advertising, health insurance, payroll or rent from income. This puts their tax rate between 50% and 80% according to the state. Is this discrimination or the ultimate in spice tax?

Huffington quotes executive director Mike Elliot of Medical Marijuana Group as saying, “All we want is to be treated like other businesses. The federal government doesn’t recognize our businesses as being legitimate, but they do demand our taxes. It’s really unfair treatment.” Most potheads will agree that is par for the course.

The UK Guardian was in good form as it reported ‘suited and booted’ marijuana entrepreneurs marching up Capitol Hill on their way to lobby Congress for a fairer deal. Their tiepins featured a warming sun rising over vibrant fields of weed. Not long ago the feds might have locked up a student for a similar dare.

The bowler-hatted brigade – well almost – wants a new deal that removes obstacles in their path including the current tax code. Dorian Des Lauriers of Franklin, Massachusetts was at pains to stress, “We’re not the typical face of marijuana”. Lobbyists are highlighting opportunities to create jobs, as opposed to their forerunners who used human rights to their advantage.

The BBC News – why do the Brits always seem to beat us with the news, must be the time zone – chose to focus on more mundane matters this morning, using the dilemma of Elliot Klug owner of the Pink House in Denver, Colorado as a hook. The poor fellow has been obliged to hire in ‘a couple of armed staff’ because he cannot find a bank to take his money and there are piles of it.

The message on the wires is that business in marijuana land is booming. All that’s needed is for the rest of the world to catch up, and it will.

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