Supreme Court Clarence Thomas Comments
In Colorado, a dispensary took the IRS to court since they could not write off business expenses in the same fashion as non-marijuana businesses. This case was appealed to the supreme court, but the supreme court declined to hear the case. While the court has rejected similar cases in the past, the rejection came with a statement from an unlikely source recognizing the growing divide between state and federal marijuana laws. Clarence Thomas, one of the most conservative court members, wrote some very comments that will likely significantly impact legalization.
He mentioned that the discrepancies in rules at the federal level with the IRS and state regulation don't make sense. They, in fact, do not make sense. Why should a cannabis business in a state where it is completely legal to have to face different tax laws as a federally legal business? "A prohibition on interstate use or cultivation of marijuana may no longer be necessary or proper to support the federal government's piecemeal approach," he wrote. Thomas also said the Supreme Court's ruling in 2005 upholding federal laws making marijuana possession illegal may now be outdated. Federal policies of the past 16 years have greatly undermined its reasoning," he said. "The federal government's current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana," said Thomas.
36 states allow medical cannabis, and 18 allow recreational use. Yet somehow, federal law does not allow these businesses to deduct their business expenses. "Under this rule, a business that is still in the red after it pays its workers and keeps the lights on might nonetheless owe substantial federal income tax," Thomas said. Marijuana businesses undoubtedly face more adversity while operating in the United States compared to other businesses. A rule change will allow smaller dispensaries entering the market to have a far higher success rate and the large US MSO's to increase their bottom line.
MA Tracker
4Front is a USA Long.
Massachusetts sales remain strong into this past week with sales of $26 Million. This is a 112% increase YoY. The run rate for the state is $1.19 Billion for adult use only. Strong Massachusetts sales are a large driver of revenue for 4Front, which remains one of our top ideas long.
Mexico Legalized
After lawmakers failed to act, the supreme court ended marijuana prohibition in an 8-3 vote, which happened on Monday. As a result, cultivation and possession will now be legal nationally. The Ministry of Health will still have some regulatory authority to permit personal cultivation. Still, people will no longer need to submit requests for legal protections through a more complicated judicial process which was the case before prohibition ended.
