Legality of cannabis by U.S. jurisdiction; cannabis was $1 billion business in CO alone in 2015
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JB: It's an exciting process. And I love that you've been able to mentor entrepreneurs who can learn from your experience. Now that marijuana has been legal at least in some places for a while, what have we seen in terms of measuring negative effects on communities, like impaired driving, for instance, or anything else that people feared?
AW: Well, communities have been able to gain greatly from the legalization. Colorado collected around $135 million in 2015 alone in tax revenue and $40 million dollars of it went to schools. Also, there still haven't been any deaths attributed to marijuana usage and opioid overdoses have decreased by more than 28% in Colorado since the legalization of marijuana here.
The industry itself continues to get push back from the federal government by having the IRS come after businesses with the punitive 280e regulations that do not allow business deductions associated with the sale of a schedule-1 drug. This makes the effective tax rate for cannabis dispensaries much higher. In addition, the IRS is now targeting the industry with an obscure rule called Form 8300. As you are aware, banking hasn't been allowed in this industry because of federal regulations. Transactions for products and materials had to be done using "cash only" purchases. Form 8300 is an esoteric document that is required when a transaction of more than $10,000 occurs. In the past, the IRS has abused farmers and ranchers for not completing this form and this practice was stopped by congress. Because cannabis is federally illegal, the IRS does not have to follow congress' guidance with regard to not using this aggressively against businesses and as such, is using this form as strategy to further attack this industry.
JB: We can hope that the IRS attitude will improve and evolve as more states legalize pot in some form or other. What haven't we talked about yet that you'd like to before we wrap this up?
AW: This is a hard one to answer. There's so much going on that I'd like to talk about but just can't right now. The legitimacy of the industry is being recognized and we see this with Microsoft's recent purchase of a tracking system. New doors of opportunity continue to open each day and I think we are learning a lot about all of the positive impacts that cannabis has on the economy. Even more than that, we are learning about the healing powers of cannabis and there is so much still to figure out with regard to research. That's why I'm really excited about MX and the work that we will be doing in the future. Stay tuned....
JB: Will do. Thanks so much for talking with me, Andy. It's been fascinating; I've learned so much. Best of luck with Medicine Man!
AW: Thank you. I appreciate you taking the time.
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