Feds Targeting California Pot Dispensaries; Told To Shut Down In 45 Days

[mrdizzle]

wow I didnt know clubs did that, funny that they get busted being as legit as can be

 

[Seamaiden]

Did you guys see that post from the collective in Marin? New user , they started a new thread outlining how they have operated for at least 15 years. The government is playing by new rules now.

 

[mrdizzle]

we shall see seamaiden, Im wondering what so few letters, 3 letters in San Francisco out of I think 35 disp. how hard is it to lok up a property owners name and copy and paste it to a memo, I could probably do it right now, on a sunday, sitting at my house

this isnt the first time feds have gone after clubs, the very first time I ever went to a club to vend, they got raided 3days later, and you know what, they are still open to today 3.5yrs later, hopenet

we will see soon enough thats for sure

 

[DazedNconfussed]

I really think theyre just trying to thin the herd a little...scare away new investors some...i dont think theyre actually trying to shut them all down. Patients still need a way to get there meds...not all patients can grow....the way I read it they were just going after disp's close to school right now....and make it a risky industry for new start ups.

 

[Seamaiden]

If what is posted here is true, I disagree.

 

[Texas Kid]

That's not how it works. Vending is annonymous you just need to be a member.

Trust me, there is a record of who, what, and for how much they bought and probably in detail that you wouldn't believe...especially if they are goin to claim they have followed all relevant reporting and tax laws...

No way around it...

Tex

 

[bluedog]

Trust me, there is a record of who, what, and for how much they bought and probably in detail that you wouldn't believe...especially if they are goin to claim they have followed all relevant reporting and tax laws...

No way around it...

Tex

While this me be something that happens in the future at Harborside that's not how it is now. I can totaly see the IRS dissallowing purchasing expenses for clubs in the future unless they file a 1099 or some such thing for that vendor. Most clubs have purposely set up their purchasing records to protect the privacy of vendors so there is no papertrail. Vendors are given vouchers when they donate and bring that voucher back in a week or two to be compensated. No voucher no pay. This is how most clubs operate.

 

[Texas Kid]

Then those vendor payments would have been disallowed anyways...no 1099, no write off..

Tex

 

[Seamaiden]

Then those vendor payments would have been disallowed anyways...no 1099, no write off..

Tex

Yeah, how can you 1099 without a paper trail?

 

[Texas Kid]

My guess is that every transaction was being detailed, maybe the members thought they where just donating product and coming back and gettin cash in a few days like a bunch of ghost, but on the business side of things it doesn't work that way...especially if like they are saying, " we are following all rules and regulations related to state and federal taxes" can't have it both ways...total annonomity of vendors for millions of cash dollars purchases and keep the correct records for tax purposes, the two don't mix.

If you must be a member to donate, I assume information is exchanged to become a member, so I bet the despensary has all they need to cover their ass for the taxman which means they exactly who you are..

Tex

 

[bluedog]

Yeah, how can you 1099 without a paper trail?

I don't know how I can better explain this but I think it's important not to spread fear on assumptions. There is only one place I know of that asks for a 1099 and that's Berkeley Patients Group but you have the option of not filing one if you have them take the taxes out then and there in which case no paperwork is needed. Buyers at clubs have no way of knowing who vendors are nor do they ask. All they know is that you are a member of that club. If they like what you have they either buy on the spot (BPG does this) or you come back with a voucher. The only thing on the voucher is the date ,the product and the $ amount While I understand that people who do not have first hand experience with MMJ dispenseries in Ca.might find this hard to believe that's how it works. Vendors are not going to give personal information and buyers don't ask for it. This is an evolving situation and the IRS may indeed demand verification of purchase expenses in the future for clubs but the clubs don't have that info at this time.Their record keeping isn't set up that way. They have purposefully shielded patients privacy by leaving no papertrail.

 

[Seamaiden]

Patients and vendors, which means they're (disp's). left holding the bag. I get it now. I'm too accustomed to looking at it from a... typical cash business perspective. Thanks.

 

[mrdizzle]

I dealt with a spot for over 2yrs, never once did he write anything down, no receipts, I never signed anything, never wrote my name, just classic hand shake business

 

[spiderman]

"Dispensaries must track and record the source of their cannabis"
http://www.medicalmarijuanablog.com/dispensaries/california-270.html

 

[Surfr]

I am pretty sure they have you as a vendor on their records in the computer system. I dealt with Fruitridge once, went back another time to purchase some wifi and there computer showed I was a vendor. The counter person asked if I was going to bring anything in soon. They said it showed in my profile that I was a vendor and brought them some White Master Kush a while back. So yeah, they DO record it wether you know it or not. I had no clue.

Surfr

 

[Texas Kid]

If they don't 1099 ya, then they are not following the rules and should shut up about being in compliance with state and federal tax laws....these are the exact despensaries they are goin to go after

I am not saying that every despensary has been tracking the info but if they are goin to claim to be following all other tax laws THEY HAVE TO...and if they are operating as a non profit, the reporting requirements on donations and payments are even higher...

Like Harborside, here is what they would be saying, " we follow all the tax rules to the T, we use solid business practices, we are upstanding business people, but we have 12 million dollars in unaccounted, undocumented, untraceable, cash transactions that we want to write off as cost of goods sold"....lolololololololol is what the IRS is goin to say...and then Fuck you pay me!! just like they just did

Tex

 

[bluedog]

Aren't there members of the Farm that also run dispensaries? Like Ridge? I would be interested to hear what they have to say about this.

 

[Texas Kid]

Only matters what the IRS has to say about it...business is business and propper business and accounting practices are the same no matter what industry your in. The IRS doens't change the the rules for a bunch of guys that don't want to tell them anything in order to break all current excepted legitimate tax reporting processes by keeping all vendor payments and products recieved annonomous....

Are you starting to see how silly the arguement is yet?

You either report it or your not in compliance, pretty simple in the eyes of the IRS, this is not up for debate, that is how it works.

If you sell to a despensary, get paid cash, with no records or documentation, and don't recieve a 1099, then you and that despensary are part of the problem and can take some credit for the current crackdown....if everyone in the industry where ACTUALLY following the rules and being upstanding citizens in the local business community alot less of this would be an issue....but 99% don't, simple as that.

Ya think the guy at Subway thinks they are playing the same game when he has to account for every penny spent for every pickle in order to get the proper documentation for his tax filings each year and a despensary says, oh yeh by the way we spent 10 million dollars on meds and don't have one shred of paper to show for it, not what we bought, not from who, not for how much...just trust us....right, that'll work

I am just saying, if they want to trumpet from the rooftops that they have followed all the tax rules, you gotta follow them all and not leave out the ones you feel might go against a patients right to privacy.....there is a big difference between a patient and a vendor and there is absolutely no guarantee of privacy for a vendor to a business, in fact there is a requirment for total disclosure for the most part to the IRS. So if your concerned about the government getting your payment info, don't be a vendor and stay a patient where that anonomity is a little more guaranteed.

None of it really matters now though, with the 208 law the IRS is inacting all despensaries are going to just be taxed on their gross sales so it won't really matter how much or what they buy, only number the IRS is concerned with is the final register tickets of gross sales....ouch!!!

Tex

 

[bluedog]

If it were like any other business they would allow rent, labor and any overhead to be deducted. The rules are being made up as they go it seems.

 

[Texas Kid]

Same rules, 208 has been in place for awhile, despensary owners just chose to look at the whole thing thru rose colored glasses and didn't really think of the impact possible enforcement might have on them and their business.

There was never any question on anyones part as to the governments possition, they told everyone goin in and repeated it every day since. I actually have a current liscenced MIP in Colorado and trust me at the very first meeting with the state thru the last it was made totally clear that we were breaking federal law and were subject to federal prosecution and possible tax problems...it was practically in bold writing in the applications.

No one that got into this industry way back when and especially in the last few years had any misconceptions about what they were gettin into and the risk of being chraged either in a federal criminal court or with the IRS for federal tax issues. So to cry about it now is just silly to me, everyone knew what the score was and where hoping against hope that it wasn't but in the end we'll see who will win.

Tex