(From the 2018 Archives)
Last week, Senators Cory Gardner (R-Colorado) and Elizabeth Warren (D-Massachusetts) introduced a new bill that would protect state marijuana laws from federal interference.
And on Friday, President Trump said he “probably will end up supporting” the measure.
For many lawmakers, the issue was never really about cannabis—it boiled down to states’ rights. If state voters approve the sale of legal cannabis, what right did the federal government have to interfere?
And with national acceptance of cannabis legalization at an all-time high, this could be the year—and the bill—that sees Colorado’s marijuana industry officially recognized at the federal level.
With that in mind, let’s take a quick look at the proposed legislation and how it would affect Colorado cannabis.
What Will the Gardner-Warren Bill Do for Colorado Cannabis?
In the U.S., 46 states have legalized cannabis for either recreational or medical use (or both). But, as we all know, marijuana remains illegal at the federal level.
And, that has left cannabis business owners in a difficult spot. Unlike other industries, cannabis companies can’t use banks or bank services or take advantage of any tax deductions available to other businesses.
It all started in 1982, when Congress passed IRC §280 E, which states:
“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”
Current tax constraints could result in some cannabis businesses paying upward of 70% in taxes!
And, with a lack of banking options, federal taxes are often paid with cash. In 2017, the IRS actually had to increase cash-counting capabilities in Denver and Seattle to keep up with tax payments from cannabis companies.
Not only is that a burden on the businesses (not to mention the IRS), but the copious amounts of cash dispensaries must hold can make them more likely to be the target of theft.
Take a look at this 2017 segment from Last Week Tonight with John Oliver, featuring Karing Kind’s own Dylan Donaldson.
In addition to preventing the federal government from interfering with a state’s marijuana laws, the Gardner-Warren bill would effectively eliminate the federal banking restrictions. That would allow cannabis companies that are operating legally in their state to manage their finances like any other business.
That’s great news for marijuana business owners, especially in Colorado, where sales numbers have started leveling off (Apr 2018 sales were only .03% higher than Apr 2017).
While we can’t expect every dollar business owners save to be reinvested in new business opportunities and products, simplifying the finances and taxes of cannabis companies could be enough to get us past this initial sales plateau.
How Is the Gardner-Warren Bill Different from Other Attempts to Legalize Cannabis?
Several attempts have been made in the past to get cannabis removed from the current list of prohibited drugs. Or, at the very least, to get the plant lowered from its current Schedule I classification (as harmful as heroin and more likely to be abused than methamphetamines).
Sen. Gardner had been blocking judicial nominees for weeks in response to the current administration’s policies around marijuana use. In April, that blockade ended with a promise from Trump that he wouldn’t interfere with Colorado’s cannabis industry.
By framing cannabis as a states’ rights issue, the Gardner-Warren bill may be able to garner enough bipartisan support to make it through a divided Congress… all the way to the President’s desk.
As Gardner says, “The bipartisan, commonsense bill ensures the federal government will respect the will of the voters — whether that is legalization or prohibition — and not interfere in any states’ legal marijuana industry.”
The new bill is also being supported through companion legislation in the House, introduced by David Joyce (R-Ohio) and Earl Blumenauer (D-Oregon). This marks the first bicameral, bipartisan attempt to end federal marijuana enforcement of prohibition in states that have legalized recreational or medical use.
Unlike the Cole Memo that directed federal agencies not to use federal funds to prosecute cannabis companies, the newly proposed bill would create real legislation around the issue. That would make it harder to overturn, and could be the first step toward full federal decriminalization.
One Small Step for Pot, One Giant Leap for Pot Kind
There is no guarantee the Gardner-Warren bill will pass. But there is reason to be hopeful. And if you’re anything like me, you’ve already started planning your end-of-prohibition pot party.
Celebrate the new bill with a gram of clean-grown bud or naturally-extracted CO2 oil from Karing Kind, Boulder’s first recreational marijuana dispensary.
Karing Kind is located just off of US-36, one mile north of Broadway, open MON-SUN from 9am to 10pm.
While we carry a variety of strains, concentrates, edibles, salves and tinctures, inventory and stock levels fluctuate from week to week and month to month. Check our menu and follow us on Twitter for an up-to-date list of edibles, concentrates and buds available.