Five elected San Francisco supervisors will lead a protest march to the steps of the federal building on Tuesday to protest the Oaksterdam University raid and the arrest of its president, the wheelchair-bound marijuana activist, Richard Lee.
It was payback time for the DEA, who have dogged Lee ever since he bankrolled a California marijuana legalization initiative in 2010. Although the ballot initiative failed in California, it emboldened marijuana activists elsewhere. Colorado activists have managed to gain enough signatures to put legalization on the November ballot in that state.
The involvement of the IRS in the Oaksterdam raid spotlights the Obama administration’s new use of federal tax laws against state-licensed medical marijuana clinics. The feds claim that licensed medical marijuana facilities violate federal tax law when they deduct normal business expenses.
Normally, a business may deduct the cost of operations from its profits – rent, salaries, taxes and insurance. But the Obama administration claims that because the sale of marijuana is illegal, even in state-licensed clinics, these businesses may not take deductions for their normal business activities.
The feds are following the “Al Capone” playbook. The legendary alcohol bootlegger’s only conviction was in 1931 for tax evasion. He beat every alcohol charge during prohibition.
The feds may be unlikely to convince a jury to convict Lee on marijuana charges, but the tax charges could tie up Lee and Oaksterdam in court for years.
If the tax angle works, the feds would try the same game plan to shutter DC medical marijuana facilities, slated to open this summer. Stay tuned.
Categories: Medical marijuana