Tag Archive: Marijuana


Oregon has long been a taxing problem for California.

Motoring south along Oregon 101 last March, your author noted the strategically located presence of “Stateline Cannabis” about 100 yards north of the California line … and 0.40 mile away the Golden State’s Smith River Agricultural Inspection Station.

Driving my Mazda Miata little green chariot with its Oregon “Pacific Wonderland” plates, your clean-cut Almost DailyBrett author and his wonderful spouse, Jeanne, were simply waved through the inspection station.

Had to think: ‘What’s the point of the California Department of Food and Agriculture’s (CDFA) Smith River Agricultural Inspection Station, if they just send you on your merry way?’

The short answer is California is trying to protect its largest industry – agriculture — from dangerous pests. The question that immediately came to mind: What about Stateline Cannabis’ agricultural products?

Statewide Cannabis describes its business as a homeopathic pharmacy. Does the State of California agree?

Why should the Golden State care?

Oregon has zero sales tax.

In contrast, California has sales taxes up the wazoo, including an incomprehensible 10.5 percent in Los Angeles County.

Immediately germane to the Oregon 101 border region, California’s Del Norte County collects sales taxes of 7.5 percent and Humboldt County, 8.75 percent.

Oregon does charge a 17 percent tax on cannabis sales, including marijuana sold at Statewide Cannabis.

California in turn assesses the statewide sales tax, plus a given county’s portion of the sales tax, a 15 percent excise tax and a cannabis business tax. A $100 retail pot price results in a $124.20 total sales price.

Any which way you assess the question, cannabis is cheaper in Oregon than California.

More to the point, the export of cannabis from Oregon across state lines ist verboten, regardless of the fact that Mary Jane is also legal in Washington to the north and California to the south.

What if the Almost DailyBrett author was sporting a ratty beard and was driving a wreck on wheels with California plates … would he and his wonderful spouse, Jeanne, be merely waved through the Smith River Agricultural Inspection Station?

Don’t think so.

California Sales Tax + Interest for An Oregon Subaru?

Back in the 20th Century, your author purchased a new $16,000 Subaru Legacy as a lawful resident of Portland, Oregon. There were zero sales taxes charged or paid.

As Martha (Stewart) would say: “That’s a good thing.”

Two years later with a move to the Bay Area, there was the necessary evil in the form of an agonizing, mind-numbing and desultory visit to California DMV to register the Subaru and secure its plates and tags.

Houston we have a problem.

The State of California under the aegis of former Governor Pete Wilson’s Department of Motor Vehicles would not register Almost DailyBrett’s Subaru Legacy even though the car was bought legally two years prior in Portland, Oregon with no-sales-tax.

No amount of honey or vinegar was going to change a bureaucrat’s mind that day. It was pound sand all the way.

Pleasanton DMV flat-out refused to register the Subaru and provide the necessary plates and tags unless and until the applicable Alameda County sales tax was paid (presently 9.75 percent) applicable at the time of the sale (forget about depreciation) plus two years of compounding interest.

Your frosted author wrote a four-figure check on the spot in order to register the car. As the say in Avenue Q, it sucks to be me.

You can only imagine the surprise two years later when an unexpected envelope from California DMV arrived in your author’s mail box. California lost a lawsuit and was required to pay back the two years of improperly assessed sales tax, plus interest.

Thank you, Howard Jarvis Tax Association.

The Dynamic Effect of Tax Increases

“The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing.” – France Minister of Finance Jean-Baptiste Colbert

“Tax the rich. Tax the rich. Tax the rich. We did. Now, God forbid, the rich leave.” — New York Governor Andrew Cuomo

Almost DailyBrett is not making any aspirations against the folks at Stateline Cannabis, who are making a living selling a once-taboo product.

The inevitable issue is that many Californians will one way or another react and respond to ever-increasing taxes – call it the dynamic effect.

If a short drive over the California-Oregon border will result in paying less … plenty less … for homeopathic pharmaceutical products, don’t you suppose more than a few folks will be naughty rather than nice?

Something tells Almost DailyBrett the Smith River Agricultural Inspection Station is looking for more than hitch-hiking insects.

https://www.statesmanjournal.com/story/news/2018/12/31/oregon-pot-marijuana-exporting-weed-out-state/2415786002/

https://www.wweek.com/news/2018/04/18/oregon-grew-more-cannabis-than-customers-can-smoke-now-shops-and-farmers-are-left-with-mountains-of-unwanted-bud/

https://www.currypilot.com/csp/mediapool/sites/CurryPilot/News/story.csp?cid=4264302&sid=919&fid=151

https://www.salestaxhandbook.com/california/rates

https://www.oregon.gov/olcc/marijuana/Pages/FAQs-Taxes.aspx

https://lumatax.com/blog/california-cannabis-sales-tax-everything-you-need-to-know/

https://mjbizdaily.com/legal-hurdles-interstate-cannabis-exports-oregon/

https://almostdailybrett.wordpress.com/2018/07/23/mary-jane-supply-and-demand/

https://almostdailybrett.wordpress.com/2019/04/01/californias-rarefied-air-tax/

 

NASDAQ: WEED?

“Marijuana may not be addictive, but money certainly is.” – University of Denver law professor Sam Kamin

ben

How long will it be before publicly traded marijuana-producer/seller companies are listed on the NYSE or NASDAQ?

Will pot company execs someday be ringing the bell and/or pounding the gavel on Wall Street?

Will they be issuing SEC-mandated 10-Q quarterly earnings releases (how high can this stock go?), uploading 10-K annual reports, producing material 8-K filings about mergers, acquisitions and restructurings and holding shareholder meetings?

Will there be handouts for investors?

Preposterous you say? Maybe not.

“…Advocates have waged savvy campaigns…presenting a clean-cut, besuited image worlds away from the tie-dyed stereotype.” – The Economist, “High Time.”

The argument has been made for Amendment 64 (e.g., Regulate Marijuana Like Alcohol Act) in Colorado. Washington and other states that marijuana should be legalized, taxed and regulated.

Does that eventually include the SEC, the Securities Exchange Commission?

How about the FTC, Federal Trade Commission? And maybe even the Financial Standards Accounting Board, FASB. Will publicly traded marijuana companies report quarterly earnings using both GAAP and Pro Forma accounting?

If there are sky-high profits to be made as a result of legalization, taxation and regulation of marijuana, shouldn’t the Military-Industrial Complex crowd get its cut on the action?

marjijuana

If the trend continues toward nationwide marijuana legalization,(federal DOJ is not enforcing in states that vote for medicinal marijuana and other uses), logic dictates that after a few years in “test” markets such as Colorado and Washington, eventually companies may acquire these firms and add marijuana to their product portfolios.

Some may even decide to directly enter the production/marketing of marijuana sector, dominate market share and eventually spin out a marijuana division as a highly covered IPO.

Ready for NASDAQ: WEED?

What does this big profits specter mean to the backyard grower, who is looking to raise a few extra bucks? Has this person ever heard of the term, “economies of scale?” Once a Philip Morris … err … Altria Group, Inc. gets into the market with its legendary ability to produce and sell in massive volume could easily result in the dreams of these small growers going up in smoke.

Think of it this way, a company that markets cancer-causing Marlboros or essentially the burning and smoking of highly addictive doctored tobacco leaves is not going to have any moral qualms about the burning and smoking of pot leaves, particularly if there is a huge profit margin attached to these sales.

CNBC’s “Mad Money” Jim Cramer was posing the hypothetical question as to whether investors should add addictive “sin” stocks to their individual portfolios in 2014. Naturally, Altria Group or NYSE: MO was on the list. There was also Diageo plc (NYSE: DEO) that markets high-end whiskies, vodkas and liquors. Ditto for Wynn Resorts Ltd. (NASDAQ: WYNN) that operates gambling resorts. Could these sinful companies be persuaded to dip into the marijuana market once the legalize-tax-regulate advocates have won the day?

Is the Pope, Catholic?

There may also be a genetically modified marijuana play for Monsanto (NYSE: MON) and a counter wholesome organic effort by Whole Foods Market (NASDAQ: WFM).  Think of the marketing and branding possibilities and the competing television ads during future Super Bowls. Move over erectile dysfunction.

Marijuana is not only consumed in smoked form, but in brownies and other pastries. There may be a great opportunity for General Mills (NYSE: GIS) that serves as the custodian of the Betty Crocker brand. Will this be the time to expand the reach of the company’s markets and upgrade the brand at the same time?

Marijuana brownies would completely change the way we think of the image of Betty Crocker with her apron.

Just as the fictional Nick Naylor from Thank You for Smoking embodies the image of the fast talking PR pro for the tobacco industry, will there be female and male counterparts for publicly traded marijuana companies? The legalize-tax-regulate crowd has already proven they can win the day, at least in some states, when it comes to marijuana. Surely future Nick Naylors can artfully defend the rising top and bottom lines and expanding gross margins of marijuana companies.

NickNaylor

Tobacco, booze, gambling and other perceived sinful companies have not only survived, heck some are very profitable with decent reputations and brands. Couldn’t the same be true for publicly traded and SEC regulated marijuana companies?

There is money to be made on Wall Street. Why shouldn’t SEC regulated publicly traded marijuana companies make big-time profits emanating from a newly legalized, taxed and regulated market?

http://www.economist.com/news/united-states/21593467-colorado-embarks-unprecedented-experiment-high-time

http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-1

http://www.economist.com/news/united-states/21573135-americas-first-market-recreational-marijuana-will-be-far-free-tax-and-tax-again

http://www.stockpickr.com/rhinostocks/portfolio/sin-stocks-january-2014/

http://seekingalpha.com/article/1156521-5-marijuana-stocks-going-crazy-and-this-could-be-just-the-beginning

http://time.com/4044698/willie-nelson-pot-brand/

 

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