LOCAL NEWS

CALIFORNIA

Harborside Files 280E Appeal

The team at Harborside, alongside their legal team at Greenspoon Marder, has filed an appeal in federal courts hoping to reverse the ruling that the dispensary made tax deductions illegally. Harborside argues that Section 280E violates the 16th Amendment and that they’ve properly calculated its COGS, or cost of goods sold.

While federal tax court has already ruled on the matter, the appeal could have monumental effects on the industry if Harborside wins the appeal.

Section 280E stipulates that no deduction or credit shall be EFFECTIVELY, THIS DISALLOWS CANNABIS allowed for any business engaged in the activity of trafficking a controlled substance.

Effectively, this disallows Cannabis businesses BUSINESSES FROM MAKING STANDARD BUSINESS DEDUCTIONS ON from making standard business deductions on their federal taxes.

If Harborside and Greenspoon Marder win THEIR FEDERAL TAXES. this case (though in nearly 40 years the IRS has not lost a case regarding 280E) it will be a huge unburdening for the fledgling Cannabis industry nationwide. This case will certainly be one worth keeping an eye on.

Looters Target Cannabis Shops S adly, dozens of Cannabis retailers across California have been the target of thieves looking to use the chaos of widespread protesting as a distraction. In many cases, the looters are not part of protest groups, but are carrying out

premeditated theft and intentionally targeting dispensaries. This list was accrued by Cannabis Now Magazine, LA Weekly, Filigreen Distribution Company and the Cannabis Buyers Club

of Berkeley in early June. Due to current legislation, many Cannabis businesses aren’t eligible for insurance and will have to

come out of pocket to get their stores up and running again.

Please consider supporting the following retailers as they look to rebuild San Francisco | SPARC, B.A.S.A., Dutchman’s Flat, Moe Green’s, Apothecarium Castro,

Connected, Mission Cannabis Club, Grass Roots, Medithrive, Green Cross, Dr. Greenthumb

California Street Cannabis, Urbana, Bryant Street Club (Project Cannabis SOMA),

Oakland | Cookies, Magnolia, ECO Cannabis, Harborside, Blüm, Osanyin, Blunts and Moore

Berkeley | Farmacy

Los Angeles | Sweet Flower, MedMen West Hollywood, MedMen DTLA, LA Kush, Cookies

Sacramento | NUG, 515 Broadway

State receives $135 million in Q1 Cannabis Tax Revenue While many businesses were closed and most folks were sheltering in place at home, Cannabis was deemed essential by California Governor Gavin Newsom during the outbreak and subsequent aftermath of Covid-19. Initially, Cannabis sales spiked but then dropped as most had overstocked on their supply - much like food and toilet paper.

The result was $134.9 million in tax dollars for the state of California, which is $42.4 million less than Q1 2019. However, these numbers are expected to change in the coming months as more businesses file their quarterly return. About half of what was anticipated was filed, due to the pandemic and the extended time frame Cannabis businesses were given CANNABIS SALES SPIKED BUT THEN to get their first quarter returns submitted.

These tax revenues are creating real change within the Cannabis community, with a $30 million disbursement being made by the Office of DROPPED AS MOST HAD OVERSTOCKED ON THEIR SUPPLY Business and Economic Development through the Cannabis Equity Grants Program.

This money is being made available to social equity applicants and licensees in the form of low or no interest loans.

Illegal Cannabis Enforcement Efforts Ramp Up

In the span of less than a month, from April 27 to May 20, the Humboldt County Sheriff’s Office Marijuana Enforcement Team eradicated over 60,000 Cannabis plants, seized more than 3,000 pounds of finished product and over $12,000 in cash.

The actual figure of cash seized is 10x or more than the amount reported, in all likelihood.

In addition to enhanced enforcement efforts in Humboldt County, other areas in California are seeing heightened pursuance of illicit Cannabis activity.

During that same time span, dozens of raids have been executed in Mendocino County, Shasta County, Siskiyou County and in the Southern California cities of Los Angeles, Lucerne Valley, Lake Elsinore, Menifee, Homeland, Wildomar, Anza and Aguanga.

These raids yielded nearly two dozen arrests, tens of thousands of plants eradicated, about a thousand pounds of finished product seized and over $300,000 in cash.