How the IRS Could Be the Deciding Factor in the Legalization of Cannabis
The quickest way to get the government to sign off on something is to present it as a profitable opportunity.
Such is the case with cannabis, the long-stigmatized plant that has proven to be far less dangerous than the prohibition of it.
It’s no secret that the war on drugs has been a massive failure. Yet even today, with nearly every state in the U.S. having some kind of cannabis legalization on the books, the government continues to drag its feet.
And it doesn’t matter which political party is squatting at 1600 Pennsylvania Avenue. Republicans and Democrats alike have ignored the dangers of cannabis prohibition in an effort to appease special interests and old people who make fat campaign contributions while warning their partisan prostitutes of the dangers of the devil’s lettuce.
Even Joe Biden, who progressives love to claim as their own, has continued to look the other way as the country demands not only the full decriminalization of cannabis but the legalization of it as well.
Bottom line: Common sense doesn’t get politicians to do the right thing — but money does.
The Government Wants Its Money
It didn’t make many headlines, but a recent announcement from an IRS official is absolutely newsworthy.
As reported by Kyle Jaeger of Marijuana Moment at an event hosted by UCLA’s Annual Tax Controversy Institute, the IRS’ Cassidy Collins discussed the "'special type of collection challenge' the agency faces when it comes to working with cannabis businesses while the product remains federally illegal."
Here’s what Collins had to say:
There’s been a number of legislative bills that have been introduced — and I am definitely not expressing any opinion personally or on behalf of the IRS about any pending or proposed legislation. But it is interesting to note that, if the law changed so that the marijuana businesses could have banks, that would make the IRS’ job to collect [taxes] a lot easier. As part of collection, we want the money. That’s our end goal there.
It’s no secret that the federal government is grasping at straws to get more tax revenues in its coffers. Look no further than recent proposals that require financial institutions to report deposits and withdrawals of all business and personal accounts with balances of more than $600 to the IRS.
It’s absolutely absurd.
But what’s even more absurd is that particular proposal came before any attempts from the White House to push for cannabis banking reform, which would actually allow the government to get its filthy lucre a lot quicker.
It would rather violate your privacy and monitor your banking records than end the prohibition on cannabis.
Of course, now that the IRS is speaking out, this could move the needle. After all, Cassidy Collins is not some random IRS employee — she is a senior counsel in the IRS Office of Chief Counsel.
This is certainly excellent news for cannabis investors, particularly those with exposure to some of the stronger U.S. players, such as Curaleaf (OTCBB: CURLF), MariMed (OTCBB: MRMD), and Innovative Industrial Properties (NYSE: IIPR).
That being said, the IRS can’t magically move mountains overnight, but the office responsible for collecting cash is piping up — and this will get the attention of the White House and, more specifically, the higher-ups at the Treasury Department.
Truth is, as much as some of these knuckle-dragging bureaucrats hate the idea of legalizing cannabis, tax revenue shortfalls may end up being far more motivational than outdated hang-ups about weed.
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