Oakland-based dispensary Harborside is continuing to fight industry-hated tax rule 280E in federal court.

At WeedWeek, Hilary Corrigan writes:

The company appealed a 2019 U.S. Tax Court ruling that found it had underpaid its taxes by $11M between 2007 and 2012. The discrepancy relates to section 280E of the federal tax code, which denies tax deductions and credits to businesses dealing in illegal drugs…

The dispensary wants the U.S. Court of Appeals for the Ninth Circuit to rule 280E unconstitutional. “Harborside wants to be treated just like Whole Foods or Kroger,” Harborside’s attorney James Mann, a partner at Greenspoon Marder LLP said.

Failing a ruling of unconstitutional, Harborside would like the court to endorse its accounting practices. No decision is likely before 2021.

Read the story.

Israeli architects have discovered cannabis residue in a shrine dating to the eighth century BC. It represents the first proof of mind altering substances used in the ancient Jewish religion.
AP

• The deposits come from two limestone altars unearthed decades ago at a complex about 35 miles south of Jerusalem.
• Researchers had long struggled to determine the materials’ chemical composition. One altar contained traces of THC, the other traces of frankincense.
• The absence of cannabis pollen and seeds in the area suggests the practitioners imported it, possibly in the form of hash.

Along with many other Democratic politicians, California Gov. Gavin Newsom (D) cited REC legalization, which he supported as Lieutenant Governor, as a policy to combat systemic racism.
AP

• Amid widespread calls to shrink down police departments, California’s Bureau of Cannabis Control wants to create an 87-member police force to combat the illegal market.
  Sacramento Bee
• ????WW California has more.

Related: Newsom also lowered his forecast for 2020 cannabis tax revenue, amid the pandemic and recession. At the same time, more cash-strapped California cities are warming to the industry.
L.A. Times, Canna Law Blog

New York State Senator Julia Salazar (D) called for lawmakers to immediately take up a package of criminal justice reforms, including REC legalization.
Marijuana Moment

Cannabis businesses and industry groups largely supported protestors calling for police and criminal justice reform. They do so as an apparently opportunistic wave of armed robberies has targeted pot shops and other licensed businesses.
WeedWeek

• “In no way do we equate the people who are protesting peacefully with what happened to us,” said Kobie Evans, co-owner of Boston’s Pure Oasis, the first minority-owned REC shop on the east coast. With reserves of weed and (often) cash on hand, dispensaries are “perfect targets” for armed robbers.
  WeedWeek
• Debby Goldsberry, executive director of ransacked dispensary Magnolia Oakland (closed until further notice) wrote “Our shop can be rebuilt, but the black lives taken by the police, again and again, are gone forever.” She advised other Bay Area cannabis businesses to close and move their inventory outside the region.
  WeedWeek
• WeedWeek columnist Dan Mitchell looked at the road to recovery for targeted businesses. A looming question: Will their insurance coverage pay out?
• The Daily Beast found criminals targeted dispensaries and pharmacies.
• To protect cannabis businesses, California regulators removed their information from state web sites.
  MJBiz

Legalization advocates quickly inserted the cause into the broader reform agenda.

• “There are many ways that policing will have to change,” wrote Marijuana Policy Project executive director Steve Hawkins. “We must add to that list the legalization of cannabis – and not just its decriminalization.”
  WeedWeek
• Drug reform groups said cannabis legalization is a necessary to mitigate entrenched racism in the U.S.
  WeedWeek
• They also warned about new powers awarded to the DEA during last week’s protests.
  WeedWeek

????WeedWeek California has more.

Last year, I wrote the industry’s failure to do anything about equity is its abiding shame.
WeedWeek

Quick Hit

1. Green Entrepreneur compiled a list of 20 Black-owned cannabis businesses to support.

Harvard physician and legalization activist Dr. Peter Grinspoon writes cannabis withdrawal symptoms are real, but not well understood. Neither of the common treatments — cognitive behavioral therapy and medication — are particularly effective.
Harvard Health Publishing

• Per Grinspoon, a recent analysis in the Journal of the American Medical Association suggests, “Many patients using MED to ‘treat’ their symptoms are merely caught up in a cycle of self-treating their cannabis withdrawal. Is it possible that almost half of cannabis consumers are actually experiencing a severe cannabis withdrawal syndrome — to the point that it is successfully masquerading as medicinal use of marijuana — and they don’t know it?”
• He finds the JAMA study “doesn’t seem particularly generalizable to actual cannabis users.”
• Grinspoon concludes, “Perhaps a simpler, more colloquial definition of cannabis addiction would be more helpful…: persistent use despite negative consequences.”

A Florida group has sued New York-based MSO Columbia Care for “allegedly conspiring to fraudulently strip its rights,” to a valuable Florida MED license.
MJBiz

• According to plaintiff MCBD, a joint venture between MCBD and Sun Bulb received a license in 2017. MCBD claims Columbia induced Sun Bulb to breach its obligations to MCBD and transfer the license to a Columbia affiliate.
• The suit seeks $50M and that the license transfer to Columbia be cancelled.
• MCBD says it’s in separate arbitration with Sun Bulb.
• MJBiz couldn’t reach Columbia Care for comment.

Quick Hits

1. Pot shops look like attractive tenants for commercial landlords.
   WSJ
2. Green Entrepreneur looks at four differences between Florida and California cannabis users.

In a survey of 170 pro MMA fighters, sports site The Athletic found 45.9% of them currently use cannabis for MED or REC purposes.

• A whopping 76.5% said they have used CBD.

Quick Hits

1. The protests have inspired Snoop Dogg to vote for the first time. “I can’t stand to see this punk in office one more year.” Are you registered to vote?
   WonderWall
2. Westword asks why so much pot-related tv is so bad?

In an interview with Business Insider, Canopy Growth CEO David Klein said he’s aggressively cutting costs. The company seeks to recover from last quarter’s $1B+ loss.

• Klein, the former CFO at U.S. liquor company Constellation Brands, a major Canopy Investor, said the Canadian giant has “missed opportunities” and needs to better understand consumers.
• Analysts at investment bank Jefferies called that, “Probably the worst thing to hear from a market share leader…That is something that in our view should be addressed prior to legalization, not over a year into it.”
• A survey found Canopy-distributed (in Canada) Leafs by Snoop is the most recognizable cannabis brand.
  Green Market Report
• Analysts pointed to four pot stocks they like. Canopy isn’t among them. Business Insider also met the first psychedelics stock analyst, Eight Capital‘s Ammar Shah.

Deep Dive asked whether big alcohol and big tobacco are “bankrolling cannabis, or killing it?“

????WeedWeek Canada is the best way to follow Canada’s pot industry.

Even with North America “binging” on cannabis, some of the industries’ biggest names continue to face strong headwinds.
Bloomberg

• Canadian giant Canopy Growth reported its second billion-dollar quarterly loss. A Seeking Alpha analyst examines the damage. Equity Guru does too, but meaner.
  MarketWatch
• MedMen reported earnings and “things are not looking great.” Nevada officials are investigating a claims that the company’s co-founders made illegal campaign contributions to Democratic Gov. Steve Sisolak.
  Simply Wall St.
• Business Insider got a hold of Eaze’s current pitch deck and found the company has “vastly scaled back ambitions.”
• Canadian MED outfit Tilray will close a grow it acquired last year.
  MarketWatch
• A report by Canadian consulting firm Bedford Group found underperforming stocks had some of the best paid executives in cannabis.
  Bloomberg
• Caliva confirmed laying off 20 corporate employees at the end of March.
  Business Insider

After 12 straight months of decline, the American Cannabis Operator Index climbed in April and May.
New Cannabis Ventures

Quick Hit

1. Canadian players are pulling out of Jamaica. The decisions owe to the companies’ financial woes and a lack of commitment on export permits from the Jamaican government. ????WW Canada is the best way to follow the Canadian cannabis world.
   Forbes

WeedWeek business columnist Dan Mitchell has a quick, incisive look at four business challenges only cannabis companies have to deal with:

You own a cannabis business. It’s legal. It’s also illegal. This makes your work life challenging. Your state government is all for you and your business, and the tax revenue it generates. The federal government could imprison you, your employees, even potentially your customers, since cannabis is still categorized as a Schedule 1 narcotic under federal law. (The feds also appreciate the tax revenue though.) 

…The list of complications created by this novel legal situation is long.

Read about all four.