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So you think you’ve got tax issues? Denver-based medical cannabis dispensary Standing Akimbo has been fighting the Internal Revenue Service for more than three years over allegations that it improperly claimed business deductions on its tax filings.
Standing Akimbo on Jan. 27 saw its bid to keep its business records out of the IRS’s hands rejected for the second time, MJBizDaily.com reported Jan. 31.
The 10th Circuit Court of Appeals upheld a 2020 decision by a district court that found the feds did not overstep their bounds or violate the company’s rights when they asked the Colorado Marijuana Enforcement Division to produce the company’s business records as part of an audit.
Under a provision of the federal tax code passed by Congress in the mid-1980s, marijuana businesses can’t take standard business deductions. The U.S. Tax Court in 2019 ruled that provision constitutional and stated that cannabis companies aren’t entitled to common business tax breaks.
An interesting side twist to the case: Standing Akimbo’s attorneys referenced an opinion by conservative Supreme Court Justice Clarence Thomas during their arguments to the 10th Circuit.
In a June 2021 opinion connected with a related case in which Standing Akimbo sought to challenge the tax code provision, Thomas wrote that the federal marijuana ban “may no longer be necessary or proper to support the federal government’s piecemeal approach.”
He called the government’s policy a “half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana” and wrote that Standing Akimbo’s situation was a prime example of the government’s “mixed signals” on cannabis.
The Supreme Court, however, denied Standing Akimbo a hearing on the merits of its case, and the 10th Circuit said in its opinion that Thomas’ statements couldn’t be used to block the IRS’s access to the dispensary’s records.
A Florida Republican in the U.S. House is attempting to change the legal situation that got Standing Akimbo in trouble.
Rep. Greg Steube on Jan. 27 reintroduced a bill that would reclassify marijuana from a Schedule I controlled substance to a Schedule III controlled substance.
Steube’s bill, HR 610, would benefit legal cannabis businesses that currently can’t claim normal business operations on their tax returns, according to a Jan. 31 report on MJBizDaily.com. It would also open up further possibilities for cannabis research.
Schedule I drugs are defined as those with no currently accepted medical use and a high potential for abuse. Schedule III drugs are defined as those with low to moderate potential for abuse or addiction.
Steube has introduced similar legislation twice before, in 2019 and 2021. Both times, the bills died because they did not receive a hearing in the Democratic-controlled House.
Steube also reintroduced HR 394, the Veterans Cannabis Use for Safe Healing Act. The bill would prohibit the VA from denying benefits to a veteran because of the use of medical marijuana in states where it is legal.
Steube is one of 100 Republicans who supported the SAFE Banking Act and is one of a growing number of House Republicans who advocate marijuana reform on the federal level, according to the MJBizDaily report.
The reclassification bill was referred to the House Committee on Energy and Commerce. It will be up to House Speaker Kevin McCarthy how long it stays there.
Stoned + Toned
When Joel Stein, a writer for The Hollywood Reporter, heard from a friend that lifting weights while high on pot improved his form, he decided to put that claim to the test.
He contacted Morgan English, “the Jane Fonda of weed workouts,” who offers online smoke-and-sweat classes for $9.99 a month through her business, Stoned + Toned, Stein reports in a Jan. 29 post on hollywoodreporter.com.
English agreed to a one-on-one session at Stein’s home, and when she arrived, she told him to stand on his yoga mat before he took his first hit of Super Lemon Haze.
“’If you smoke and you’re on the couch, you’re not going to want to get up and do a workout,’ she explained,” Stein writes.
Here’s what Stein says he learned while lifting light weights, planking and doing yoga moves:
• He got thirsty, although he wasn’t sweating.
• He was able to focus on using the exact right muscles.
• He kept losing track of time, which made exercising less unpleasant.
“I stopped caring whether I was working out or not working out,” he writes.
The story first appeared in the Jan. 27 issue of The Hollywood Reporter.