Tag: the war on (some) drugs

Marijuana Companies Are Blocked From COVID-Era Employee Retention Tax Credits Under 280E Penalty, Federal Court Says

In yet another wrinkle stemming from the ongoing federal prohibition on marijuana, a U.S. district court has ruled that an Internal Revenue Service (IRS) tax rule prevents state-legal cannabis companies from being eligible for refunds of employee retention credits (ERCs), which helped businesses continue to pay workers during early COVID-era shutdowns.

In the decision, the U.S. District Court for the Western District of Washington ruled that “nothing in the plain text of [IRS code] Section 280E limits its application to income tax credits,” rejecting arguments from plaintiffs.

The government, meanwhile, contended that the Section 280E prohibits any and all tax credits, including refunds of the COVID-era ERCs, which are typically refundable for other businesses.

On May 9, the court granted the government’s motion to dismiss the the case, Solstice Holdings v. U.S.

Section 280E disallows standard tax deductions and tax credits for businesses that traffic in Schedule I or II substances. It applies even in cases where businesses are operating in compliance with state law.

The law firm Holland & Hart said in a post about the new ruling that it appears to be “the first case where a court has addressed the application of IRC § 280E to ERC.”

Another law firm, GreenspoonMarder, noted in post about the district court opinion that many cannabis businesses applied for the ERC during the pandemic—and many received it.

“Some were deemed ‘essential’ and had to stay open during the pandemic despite the higher costs associated with continued operations during the pandemic and various restrictions that rendered it much more difficult to visit their stores,” attorneys Nick Richards and Sabrina Strand wrote recently.

“When the ERC first came out, there was a question as to whether it was available to cannabis companies because it creates a tax credit that Section 280E may disallow,” the post points out. “There was also an argument that it didn’t apply to the ERC, because Section 280E is part of Section A of the [Internal Revenue Code], which concerns income rather than employment taxes. At least one court now disagrees.”

Both law firms suggest the case out of Washington State creates a standard across all states within the jurisdiction of the U.S. Court of Appeals for the Ninth Circuit. GreenspoonMarder, for example, says the ruling “technically only applies to companies located in the 9th Circuit.”

“That said, as the only opinion on this subject,” lawyers wrote, “the IRS may look to it as authority regardless of whether taxpayers are in one of the nine states located in the Circuit.”

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Missouri AG Sends Cease And Desist Letters To 18 Hemp Companies, Warning More Are On The Way

Missouri Attorney General Andrew Bailey (R) has sent several cease-and-desist letters to companies selling a hemp product called THCA flower that looks exactly like marijuana flower sold at dispensaries.

Bailey’s letters threaten legal action, including injunctions, civil penalties and attorney’s fees if the companies continue to sell the products.

“When purchasing products, Missourians deserve to know if they are being exposed to dangerous side effects like psychotic episodes, hallucinations or other life-threatening risks,” said Attorney General Bailey in a statement to The Independent. “We have issued 18 cease and desist letters so far, and more are forthcoming.”

Cannabis lobbyist Eapen Thampy said about a dozen smoke shops in St. Louis received the letters, and in some cases, THCA flower makes up 60 percent to 80 percent of the companies’ inventories.

Thampy said he’s working with the companies to put together a response to the letters and preparing for potential litigation.

The action is the first major move since Bailey created a new specialized unit last fall, with the aim to assist the state’s alcohol and tobacco regulators in cracking down on intoxicating hemp products.

In September, Bailey vowed his new unit would work with the Missouri Alcohol and Tobacco Control (ATC) Division to bring legal action against licensees selling unregulated psychoactive cannabis products that violate the Missouri Merchandising Practices Act.

“The ATC will assist by making its investigators available as witnesses for legal proceedings resulting from actionable referrals,” Bailey said in September. “Our enforcement toolkit will be robust from cease-and-desist letters and investigations to subpoenas and lawsuits to referrals for criminal prosecution where appropriate.”

The letters that went out last month state that the companies are “directed to cease and desist from selling” hemp products that contain more than 0.3 percent THCA on a dry weight basis. THCA is a naturally abundant cannabinoid that transforms into Delta-9 THC when smoked or heated.

However, this is not what an official cease and desist order looks like, said Jefferson City-based attorney Chuck Hatfield.

“It is an informal cease and desist,” Hatfield said. “It is not a letter that has the force and effect of law. It’s more in the nature of a request to stop.”

Under state law, if Bailey wanted to issue an official cease and desist order—as he did for Planned Parenthood in March—Hatfield said Bailey would have to issue a notice of intent first. The company would have the right to appeal through an administrative hearing, as well as challenge the order in court.

“But he hasn’t done any of that,” Hatfield said.

Bailey could also file a lawsuit under Missouri Merchandising Practices Act, and that doesn’t require a cease and desist order, he said.

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Trump’s Federal Budget Cuts Could Boost Marijuana Legalization Efforts As States Seek New Revenue, Congresswoman Says

A Democratic congresswoman says the Trump administration’s push to make states pay a larger share for public services such as food assistance and health care amid his efforts to cut federal spending might ultimately “push them in the direction of legalizing marijuana” so they can offset those costs with cannabis tax revenue.

In an interview on the National Cannabis Industry Association (NCIA) Voice of Cannabis podcast that was released on Thursday, Congressional Cannabis Caucus co-chair Rep. Dina Titus (D-NV) commented on a wide range of marijuana policy issues—including bipartisan legalization legislation, stalled action on federal reform and the destigmatization of cannabis use in her state after enacting an adult-use marijuana market.

One of the “only good things that comes out of the policy of the White House is that they are pushing more things to the states to pay for—like [Supplemental Nutrition Assistance Program (SNAP)] and like Medicaid—and so states may be looking for additional sources of revenue,” Titus said. “That may push them in the direction of legalizing marijuana, to some extent, so they can get that tax revenue generated.”

Titus said the lawmakers who back reform were initially “optimistic” about the prospects of a federal policy change under President Donald Trump because of comments he made on the campaign trail in favor of rescheduling, industry banking access and a Florida adult-use legalization ballot initiative left the impression “he was going to be supportive.”

“Now we’ve seen that kind of stall, and we have this crazy secretary of [the U.S. Department of Health and Human Services (HHS)] that I think is on drugs,” the congresswoman said, referencing Robert F. Kennedy Jr. “I don’t know where he’s coming from, and so it’s hard to read what the administration is going to do and if they’re going to make it a priority and if they’re going to weigh in. So that’s another element of the politics that we have to keep in mind.”

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FDA Approved Hundreds of Drugs With No Evidence They Work

The U.S. Food and Drug Administration (FDA) has approved hundreds of drugs over the last several decades with little to no evidence that they work, according to a new investigation by The Lever.

Many of the drugs are permitted to stay on the market, despite ample evidence that they don’t work and that they cause serious and irreparable harm.

The Lever’s two-year investigation into the FDA-approved drugs analyzed government reports, internal FDA documents, investigators’ notes, congressional testimony, court records and more than 100 interviews with researchers, federal officials and patients.

The investigation found that from 2013 through 2022, 73% of drugs approved by the FDA didn’t meet the agency’s four foundational standards required to show the drugs work as expected. Fifty-five of the approved drugs met only one of those four standards, and 39 met none of them.

More than half of drug approvals were based on preliminary data, which meant the pharmaceutical companies didn’t submit evidence that patients had fewer symptoms, showed improvement or had their lives extended.

The approval rate of such drugs has accelerated over the last decade, according to the U.S. Department of Health and Human Services Office of Inspector General.

Cancer treatments, in particular, raised serious red flags. Only 2.4% of the 123 cancer drugs met all of the criteria, and 29 met none. The FDA approved 81% of cancer drugs based on preliminary data.

The report did not evaluate any vaccines.

The Lever wrote:

“These statistics come after billions of dollars and years of lobbying by the pharmaceutical industry and patient advocacy groups pressuring Congress to loosen the FDA’s scientific standards.

“The resulting seismic shift from proving drugs work before they are approved to showing they work only after approval — if ever — has been quietly accomplished with virtually no awareness by doctors or the public.

“Insurers and taxpayers effectively pay for research after drugs hit the market as pharmaceutical companies reap the profits. Patients serve as the unwitting guinea pigs — with very real consequences.”

The outlet also reported that an estimated 128,000 people are killed each year by side effects from prescription drugs prescribed as indicated.

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Marijuana Users Are Nearly 5 Times As Likely To Regularly Exercise Than Eat Fast Food, Stereotype-Busting Survey Shows

Marijuana consumers are more than three times more likely to regularly exercise than drink alcohol—and they’re nearly five times more likely to routinely work out than eat fast food—according to another stereotype-defying survey.

The poll from the cannabis telehealth platform NuggMD looked at the habits of cannabis users, who were asked about the frequency they engage in seven different activities—from alcohol consumption to movie theater attendance.

One of the takeaways was that marijuana consumers reported regularly engaging in exercise (27.4 percent daily and 34.9 percent multiple times per week) significantly more often than using alcohol (6.1 percent daily and 11.3 percent multiple times per week).

Another finding from the survey was that cannabis consumers are 4.8 times more likely to regularly exercise than to eat fast food (1.5 percent daily and 11.5 percent multiple times per week).

“This finding is yet more evidence that today’s cannabis consumers defy the prohibitionist stereotype of layabouts munching Doritos and then crossfading with booze to get their fix,” Andrew Graham, head of communications at NuggMD, told Marijuana Moment.

“The data shows that cannabis consumers self-report several healthy lifestyle habits. When compared with federal data on exercise and fast food consumption, our poll shows that cannabis consumers are in fact more likely to exercise and less likely to eat fast food than the average U.S. adult,” he said. “Previous polling we’ve done shows cannabis has a distinct replacement effect on alcohol use, and this poll charts a similar direction.”

“For millions of wellness-focused Americans, cannabis is simply part of the routine. It’s kind of mind-blowing how wrong the prohibitionist crowd is about everything,” Graham said.

Several other studies have similarly found that cannabis users exercise at average or above-average levels compared to non-users, bucking the long-held stigma that marijuana makes people lazy. This is one of the latest data points to show the same.

Notably, the new poll also found that relatively few marijuana consumers frequently use food delivery services, with just 3.3 percent reporting that they order delivery daily and 8.3 percent saying they use such services multiple times a week.

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250,000 Texans Voted to Decriminalize Marijuana, So Why Are Politicians Trying To Override Them?

As the executive director of Ground Game Texas, I lead a team organizing working-class Texans to pass movement-driven local policies at the ballot box. In a state where our elected officials are openly hostile to justice, and voter suppression is rampant, we take the fight directly to the people. And the people are showing up.

Through our local campaigns, we’ve gathered hundreds of thousands of petition signatures and earned a quarter of a million votes to decriminalize marijuana across Texas—from Austin to Killeen, Lockhart to Dallas. In a state with low voter turnout, marijuana decriminalization has earned a supermajority of the vote in every city, and over-performed compared to the rest of the ballot. But instead of respecting the will of the voters, politicians in this state are doing everything they can to overturn these democratically elected policies.

We are fighting locally, fighting statewide, and fighting crony courts. Last year in Lockhart, the city attorney tried to split our single policy into 13 separate ballot items to bury it in bureaucracy. We stopped them. A state appeals court just upheld a lawsuit designed to stop our cities from implementing our marijuana decriminalization. And at the legislature, five separate bills were introduced this session to gut local control and block citizens from changing the law through ballot initiatives.

This is about more than plants with healing properties. It’s about power. It’s about democracy. And it’s all connected.

The war on drugs isn’t a failed policy—it’s a successful tool of oppression. A tool used to criminalize poverty. A tool used to lock Black and Brown Texans into cycles of incarceration. A tool used to destabilize families, punish veterans and disabled people and make survival a crime.

And when we rise up to change those laws, the people in power rewrite the rules to keep control. That’s not new. It’s a familiar playbook.

From Jim Crow poll taxes to modern-day gerrymandering and felony disenfranchisement, this country has always created new systems to block the people most impacted by oppression from changing it. What’s happening in Texas right now is just the latest chapter.

Let’s be clear: The issue isn’t that Texans don’t care. The issue is that the system was designed to keep most Texans out.

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Liver Injuries Reportedly on the Rise: Common, FDA-Approved Meds Linked to Alarming Trend

As more people find themselves using more vitamins, supplements, and everyday medications, more related health issues keep cropping up.

And a recent spate of reports highlights a particular danger for one part of your body: the liver.

“As cases of drug-induced liver injury (DILI) are on the rise, experts are warning of the hidden dangers associated with some common medications and supplements,” Fox News reported Monday.

The outlet added, “Statistics show that DILI, also known as toxic hepatitis or hepatotoxicity — which is known to be a significant cause of acute liver failure — has been growing in Western countries since the 1960s.”

“Even medications that have been tested for safety and approved by the U.S. Food and Drug Administration (FDA) can potentially cause liver injury in rare cases,” Fox reported.

Just days earlier, on May 27, NBC News had posted a similarly alarming report regarding these health ramifications.

The outlet spoke to Robert Grafton, a former medical technologist who noticed signs of liver failure in himself and largely traced it back to various supplements and vitamins he had been taking.

“I stopped taking everything, thank goodness,” Grafton said. “If I hadn’t known, if I was not in the medical field, I might have thought, ‘Oh, I think I’m getting sick. I need to take some more of these supplements to help me feel better.’”

Despite stopping, symptoms worsened and test results pointed toward devastating liver failure.

It turned out to be a case of DILI.

“It is estimated that between 13.9 and 19.1 cases of DILI occur for every 100,000 people, according to recent research published in the journal Toxicology Reports,” Fox noted.

The triggers of DILI can vary, from the vitamins and supplements that Grafton had been taking, mentioned above, to aspirin, the common over-the-counter painkiller.

Those with health conditions are more susceptible to DILI, but as Grafton — someone who began taking his health seriously after having children — shows, it can hit very healthy people, too.

Fox News medical analyst Dr. Marc Siegel told his network that the unregulated nature of supplements could betray some of their purported health benefits.

“The biggest problem with herbal supplements is that the amount you are taking of active chemicals isn’t strictly regulated, so you don’t know exactly what you are getting,” he said. “And since several of the supplements are metabolized through the liver, there is now an increasing incidence of liver toxicity in users.”

According to the National Institutes of Health, “nearly all classes of medications” can cause DILI.

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Missouri Officials Will Begin Unannounced Marijuana Dispensary Visits For New Product Testing Initiative Next Month

State cannabis regulators will begin their first attempt next month to double check the work of licensed testing labs tasked with ensuring the safety of Missouri marijuana products.

Starting July 1, staff with the Division of Cannabis Regulation will arrive unannounced at dispensaries and collect about 50 products a month off the shelves. They’ll take them to the Missouri State Public Health Reference Laboratory to be tested for things like mold, pesticides and a whole range of other things.

Ryan Bernard, the division’s testing and research unit manager, said the unannounced sampling has been in the works for a while as a way to add an extra level of compliance. The division, Bernard said, isn’t expecting to find problems.

“We won’t know until we see the data,” Bernard said. “I have full faith and confidence in our testing licensees that they’re testing according to rule as it’s been outlined.”

However, national testing lab experts told The Independent that Missouri’s regulators might be shocked at the results.

“Shelf testing has not gone well in any state that I know of, especially if it’s just starting,” said Josh Swider, vice chair of the cannabis working group for American Council of Independent Laboratories. “It will be very telling very fast.”

Swider pointed to a citation in Arizona in April of a cannabis lab, where the state found more than a dozen alleged “deficiencies” including problems with the lab’s potency testing and pesticide and microbial detection methods.

Swider called the levels of pesticides on the Arizona products “sickening.”

“But this is what you’re seeing around the country,” said Swider, co-founder and CEO of Infinite Chemical Analysis Labs in San Diego. “Regulators are starting to enforce. They’re realizing an issue that’s been systemic for a long time.”

Other common issue Missouri regulars might also find, he said, are inflated levels of THC on products.

Regulators previously talked about conducting a “round robin” testing, where the state’s certified testing labs would double check each other’s work under the state’s instruction. Amy Moore, director of the Division of Cannabis Regulation (DCR), told lawmakers in 2023 that this additional testing rule was “critical.”

“The challenges in regulating and relying on for-profit cannabis testing labs,” Moore told lawmakers at a 2023 committee hearing, “is one of the most discussed challenges in the national cannabis regulatory community.”

However, the state never ended up getting the process going for a variety of factors, Bernard said, so the unannounced samples will be the regulators first attempt at a testing backstop.

Lawmakers began allocating money for this kind of sampling to be tested at the state laboratory in the fiscal year that began on July 1, 2024 with $3.8 million. Most of it went unspent because the cannabis testing methods were “still in the process of being implemented,” according to state budget documents. Another $2.4 million was allocated for this fiscal year ending on June 30, and it’s unclear how much of it has been spent.

Bernard couldn’t speak on the budget for testing, he said, because the division and state lab budgets are “totally separate.”

“Our operating budget is DCR only,” he said. “State public health labs is theirs.”

The lab will receive another $2.4 million for the fiscal year beginning July 1.

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Rhode Island Bills To Restrict Hemp THC Drinks Ignore Science And Current Regulations

As co-founder of Rhode Island’s only U.S. Department of Agriculture (USDA) organic hemp farm, and the largest outdoor cannabis farm in the state, I’ve spent the last eight years helping build the hemp industry from the ground up.

At Lovewell Farms, we’ve operated under one of the strictest regulatory frameworks in the country, subject to licensing, batch testing, tetrahydrocannabinol (THC) limits, secure packaging requirements and product traceability. Yet two recently proposed bills, H6056 and H6270, would cut licensed hemp farms like ours out of the very market we helped establish.

These bills, introduced by Democratic Reps. Jacquelyn Baginski of Cranston and Scott Slater of Providence, aim to regulate the sale of hemp-derived beverages containing delta-9 THC, the compound most commonly associated with cannabis intoxication.

Slater’s bill would specifically eliminate the sale of such beverages and drink mix powders in Rhode Island, unless these products are specifically included in the state’s cannabis laws. The bills misrepresent both the science behind these products and the legal infrastructure already in place.

During a recent House hearing, Rep. Baginski stated, “I was surprised to learn that hemp-based THC products are also available in the marketplace and largely sold unregulated…at any establishment with a retail sales permit. That could be a convenience store, a hair salon, a gas station, anywhere.”

Respectfully, this is inaccurate. In Rhode Island, consumable hemp products must be produced by licensed handlers and tested by certified labs. They are subject to strict limits on THC content, comprehensive labeling standards, and age restrictions. If some products are being sold outside these rules, that’s a failure of enforcement, not evidence of an unregulated system.

Rep. Slater’s testimony in support of his bill, which would effectively ban all hemp-derived THC beverages unless sold through a dispensary, also included misleading claims. He asserted that “the hemp-derived THC products are now being sold outside the regulated cannabis system with minimal oversight, including limited testing, weak labeling, no seed-to-sale tracking as well as avoidance of cannabis taxes.”

This characterization erases the work of licensed hemp producers who follow every requirement the state imposes, many of whom, like us, already distribute specific products through dispensaries and operate with full compliance under existing cannabis laws.

Slater went on to say that allowing hemp beverages undermines Rhode Island’s cannabis cultivators, whom he described as his constituents. “I really find it unfair that as soon as this market has started that we’re trying to undermine them…and allowing folks that found kind of a loophole with this synthetically altered hemp in drinks…without going through the same framework that everyone else has.”

But our farm has always followed the framework. There is no loophole for us, just increasing restrictions on products we’ve made legally, safely and transparently for years.

Both bills ignore a crucial scientific fact: Not all hemp products are intoxicating.

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USSS Ordered Destruction Of White House Cocaine Day After Closing Case

Two years after the U.S. Secret Service discovered a bag of cocaine in the White House in July, 2023, documents showing orders for its destruction within 24 hours after the agency closed the case are raising new questions about the scrupulousness of the investigation.

A U.S. Drug Enforcement Agency document titled “Destruction” states that the bag of cocaine was sent to the Metropolitan Police Department for incineration. That document, obtained through a Freedom of Information Act request, doesn’t display a date for the destruction. But other internal Secret Service records show that the cocaine was tested by the Secret Service, the D.C. Fire Department hazmat technicians, and the FBI before being sent back to the Secret Service for storage on July 12. Two days later, it was transferred to the D.C. police department for destruction. The Secret Service shut down the cocaine investigation 11 days after discovering it.

The destruction of narcotics evidence must comply with environmental and safety regulations, and the D.C. police department has an Environmental Protection Agency-approved incinerator that federal agencies often use to destroy narcotics that are not involved in active legal cases.

D.C. police officials referred all questions about the cocaine’s apparent destruction to the FBI. There’s no entry or date for the cocaine’s actual destruction.

Early last week, FBI Deputy Director Dan Bongino announced that he was re-opening the investigation into the cocaine found in the White House, as well as the leak of the Supreme Court’s Dobbs decision overturning Roe v. Wade and the discovery of a pipe bomb at the Democratic National Committee headquarters on Jan. 6, 2021.

Bongino reiterated his commitment to getting to the bottom of those cases in a Wednesday night interview with Fox News’ Sean Hannity.

“Well, I get a kick out of it on social media,” Bongino said. “People say, ‘This case isn’t a big deal. I don’t care.’ Well, I care. … You don’t care that a [potentially] hazardous substance made its way into the White House? We didn’t know what it was, and we don’t seem to have answers? Well, we’re going to get them. I’ve got a great team on it.”

While the cocaine bag found in the White House appears to have been destroyed, internal Secret Service documents show that the agency retained and stored a second piece of evidence, an envelope of three tubes of DNA that the FBI attained from the plastic bag of cocaine. It’s unclear how much DNA those tubes contain, though the Secret Service has stood by its statements that the FBI found insufficient DNA to pursue any investigative leads.

When the Secret Service closed its investigation into who left the cocaine in the White House on July 13,  the agency issued a statement explaining its decision. Secret Service spokesman Anthony Guglielmi asserted that camera surveillance footage didn’t provide any “investigative leads or any other means for investigators to identify who may have deposited” the cocaine in the White House, adding that FBI laboratory results “did not develop latent fingerprints and insufficient evidence was present for investigative comparisons.”

But neither the FBI nor the Secret Service has publicly released the FBI laboratory results, and DNA experts say the only fool-proof way to demonstrate whether sufficient DNA existed on the baggie now to run against hits in national and state criminal DNA databases is to test it again.

“The only way to really tell, is to test it again and see what happens,” Gary Clayton Harmor, chief forensic DNA analyst at the Serological Research Institute in Richmond, California, told RCP. “Some labs will test anything, and others are more reluctant if they think it’s not a good enough sample to [test against national DNA databases]. The FBI, knowing them, they’re probably very conservative, and it may be that they said, ‘Nope, there’s not enough here to do anything meaningful with.’ It really depends on who’s doing the testing and how they did it.”

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