Pubdate: Fri, 02 Oct 2015
Source: Ukiah Daily Journal, The (CA)
Copyright: 2015 The Ukiah Daily Journal
Contact: http://www.ukiahdailyjournal.com/feedback
Website: http://www.ukiahdailyjournal.com/
Details: http://www.mapinc.org/media/581

MENDOCINO COUNTY BOE REPRESENTATIVE STUDYING COLORADO MARIJUANA REGULATIONS

Fiona Ma, the District 2 California State Board of Equalization 
member, and local representative of Mendocino County, led a 
fact-finding tour to Colorado last week to study Colorado's effort to 
establish a comprehensive regulatory and taxation system for cannabis.

The tour included meeting with government agencies like the Office of 
Marijuana Coordination, banks, tours of grow operations, manufactures 
of cannabis-infused products and live demonstrations of tracking 
systems used to record, report and enforce Colorado restrictions on 
transportation and distribution of cannabis in-state.

"California has its work cut out for it," Ma stated. "Based on the 
sheer scale and numbers involved with our current medicinal cannabis 
industry, it is clear that regardless of what other states are doing, 
California will be a game changer."

In 2014, California collected $44 million in sales taxes from only 25 
percent of the medical cannabis dispensaries that have active 
operations in the state, according to Ma's office.

Ma and the Board of Equalization, which already collects sales and 
use taxes for voter-approved medicinal cannabis operations in 
California, has been focusing closely on the existing industry and 
preparing for possible legalization of recreational use of cannabis 
in California in 2016.

Due to conflicting federal law, cannabis operations are virtually 
excluded from accessing banking services, meaning dispensaries are 
strictly-cash operations, according to Ma. With banks reluctant to 
take on the risk and responsibilities associated with accepting money 
earned from a substance that's still illegal under federal law, 
banking has become a rare and/or very costly luxury in the marijuana industry.

This cash-based system makes auditing and assessing the gross 
receipts of cannabis operations exceedingly difficult from a 
tax-collection standpoint, and means that the owners and operators of 
medicinal cannabis operations face a number of challenges  the 
biggest being public safety risks. Any business that has cash money 
on its premises runs a risk of becoming a target of theft.

Though Colorado has not yet reported any violent crimes associated 
with its cannabis industry, according to Ma, this may be in large 
part due to access to resources like safe transport and banking 
within the industry.

While Colorado reports that about 75 percent of its cannabis industry 
has access to some sort of bank account, in California it is 
estimated that only 10 percent of the cannabis industry has access to 
banking, according to Ma.

Additional challenges include meeting payroll obligations for 
employees who often are paid in cash, as well as tax payments to 
their state and the federal government.

"Keeping an industry and our citizens from fully integrating into our 
tax system and our financial infrastructure is a lose-lose 
proposition," Ma stated. "It makes no sense to allow industries the 
flexibility to set up shop, but not have access to the most basic of 
necessities like a bank account. This frustrating situation is 
forcing states to no longer ask permission, but instead, do whatever 
they can get away with within their legal rights."

In addition to banking, Ma said transportation issues continue to be 
of great concern as California moves to implement the regulatory 
system established by legislation negotiated by the state Legislature 
and Gov. Jerry Brown. Board Member Ma will be convening a 
transportation-specific stakeholders meeting for medicinal cannabis, 
which is tentatively scheduled for Nov. 20.
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MAP posted-by: Jay Bergstrom