Could the IRS put marijuana companies out of business?
These are the best of times and the worst of times for marijuana banking depending on if you want to view the glass half empty or half full. I’m definitely going with half empty.
For you optimistic types, we have the news that a credit union is proudly proclaiming itself the first to offer marijuana banking services catering to marijuana’s nascent recreational marijuana industry in Massachusetts where it has been legalized. I even heard a person being interviewed on Bloomberg Radio this morning saying that the emerging industry will put pressure on neighboring states to further loosen their marijuana laws in order to claim their piece of the pie. This is a direct shot at New York which has one of the most restrictive marijuana laws in the country.
Now for the bad news and there’s lots of it. There are growing signs that the IRS is emerging as a major roadblock to expanding the marijuana industry, even in states where it is legal and federal prosecutors have shown no inclination to move against marijuana related businesses operating legally under state law. The case that has gotten most of the attention is the Justice Department’s announcement that it has obtained a conviction against the Oregon operator of a marijuana business for not paying his taxes. But from what I’ve read about this case, this can be brushed aside as the Justice Department taking action against someone who simply neglected to pay his taxes.
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