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US Tax Court denies deduction request under §280E, but leaves the door open for future challenges

November 5, 2019 , , , , , , ,

By Shuki Greer, Esq.

Last week, the Tax Court continued the line of cases denying tax deductions under Internal Revenue Code §280E. That section says that any business which is “trafficking in controlled substances” cannot receive many of the traditional deductions that a business may take. Otherwise put, this means that a company must pay taxes on all of its incoming revenue before it subtracts most of its expenses.

This law can be a severe punishment for a cannabis company that may be operating entirely legally under state law. Unfortunately, the federal government still considers them to be “drug-dealers” and holds this punitive tax measure over their heads.

The case before the tax court involved a dispensary that filed taxes and took deductions for its business expenses. The IRS sent them a bill of $1.26 million, plus another 250K in fines. The company filed suit, asking the court to declare that it did not have to pay those bills.

A divided court rejected the company’s three arguments. In addition to the majority opinion, there were two concurring opinions and two dissenting opinions. Of particular interest is the Gustafson dissent, which opens up a new avenue for declaring §280E to be a Constitutional violation. Essentially, Gustafson argues, that the 16th Amendment allows Congress to tax income. Income is defined as “gain”, or net profits, minus costs, to get those profits. So for Congress to then disallow normal business expenses, it means that they are taxing more than actual income, which violates the 16th Amendment.

This argument was only agreed to by one other Judge on the tax court, which ultimately ruled against the dispensary. However, in the future, as the public opinion shifts, the policies behind these prohibitive rules may fall away, and we may not be far away from a court coming to the opposite conclusion. Legal Cannabis companies are working tirelessly to follow the law, and they should be rewarded for doing so. Continuing the regime of these prohibitive financial policies constitutes a “subsidy for the black market.” The way to solve this problem is to shift the financial incentives in favor of operating under a legal framework, and avoiding this severe tax problem is the best way forward.

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Benjamin Caplan, MDUS Tax Court denies deduction request under §280E, but leaves the door open for future challenges
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Pre- and Post-natal Tobacco and Cannabis Exposure Impacts Children in a Sex-Specific Manner

October 28, 2019 , , , , , , , , , , , ,

Pre- and postnatal tobacco and cannabis exposure and child behavior problems: Bidirectional associations, joint effects, and sex differences

Summary Info:

Prenatal maternal cannabis and tobacco use is predictive of behavioral problems among toddlers. Resulting differences from control groups include anxiety, depression, and attention problems. Female children of mom’s consuming substances, in particular, seem to be more susceptible to problems relating to internalization, attention, and sleep. Additionally, the behavioral problems induced by prenatal cannabis and tobacco consumption often lead to further maternal substance consumption, which frequently exacerbates existing behavioral problems. 

Highlights of study of mother's prenatal and postnatal consumption of cannabis
Highlights of interplay of mother's prenatal and postnatal consumption of cannabis with children
Highlights of interplay of mother's prenatal and postnatal consumption of cannabis with toddlers

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Pre- and postnatal tobacco and cannabis exposure and child behavior problems: Bidirectional associations, joint effects, and sex differencesDownload

This paper is also stored here:   http://bit.ly/34j9gVJ      inside the CED Foundation Archive

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Benjamin Caplan, MDPre- and Post-natal Tobacco and Cannabis Exposure Impacts Children in a Sex-Specific Manner
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Veterans Using Cannabis Medicinally More Likely to have PTSD than Recreational Users

October 25, 2019 , , , , , , , , , , , , , , , ,

Title: Medicinal versus Recreational Cannabis Use among Returning Veterans

In Summary:

A recent study found significant mental and physical health differences between veterans who use cannabis that they label as “medicinal” use versus those who prefer to label their use as “recreational.” Veterans who feel that they are self-medicating with cannabis, in what they believe fits more closely with a “medical” label are five times more likely to suffer from post-traumatic stress disorder (PTSD), nearly four times more likely to suffer from Major Depressive Disorder, and are more likely to experience Insomnia, or trouble sleeping. Furthermore, a majority of veterans medicating with cannabis suffer from conditions that qualify them to receive a medical marijuana registration card. Even so, they tend to refrain from discussing their interest in access with their doctors, out of fear of losing their valuable VA benefits.

Dr. Caplan and the #MDTake:

Over the years, countless veterans have valiantly and courageously dedicated themselves to missions of support for their fellow men, women, and country. In preparation, training, service, battle, leadership, education, and so many other ways, veterans have given back to their culture in a way few others can. The understanding that they may be shunned by their culture for seeking help, related to the suffering they may have experienced while serving their country, is unconscionable. It is shameful that the government and military have not appreciated and supported the easy opportunity to give back to our veterans, and it is long overdue that the culture gives back to those who have given a piece of themselves so that others may share the liberties they have served to uphold.

group differences between medicinal and recreational cannabis users in diagnoses, cannabis-related problems, reasons for using marijuana, and other health-related and substance use outcomes
characteristics of medicinal cannabis users
characteristics of medicinal cannabis users
characteristics of medicinal cannabis users
Medicinal versus Recreational Cannabis Use among Returning VeteransDownload

This paper is also stored here:    http://bit.ly/2MKhksv     inside the CED Foundation Archive

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Benjamin Caplan, MDVeterans Using Cannabis Medicinally More Likely to have PTSD than Recreational Users
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Extensive Cannabis Studies Underway Globally

October 23, 2019 , , , , , , , , , , ,

Current Status and Prospects for Cannabidiol Preparations as New Therapeutic Agents

In Summary:

As of 2016, upwards of 60 clinical trials relating to the use of medical cannabis were in progress. The scope of clinical trials included conditions such as anxiety, cocaine dependence, infantile spasms, schizophrenia, solid tumor, and many more. The status of cannabis as a Schedule I drug, under the Controlled Substance Act, limits researchers’ ability to freely collect data if they require support from NIH funding. While there are opportunities for researchers to study cannabis and its derivatives with the support of private funds, this typically risks an appearance of sacrificed scientific integrity and independence. Very few private entities would condone research which might shed an unfavorable light on their products. On the other hand, current NIH-funded research requires the use of the national supply of cannabis, a crop well-known to be very limited in quality. Increasingly, more states have been legalizing the medical and recreational use of cannabis in recent years, allowing scientists with more opportunities for private funding in which to shed more light on the vast medicinal benefits of cannabis. Animal models and human trials have pointed toward clinical applications of medical cannabis including anxiety, nausea, seizures, and inflammation, although the array of competing and synergistic compounds within the plant seem to continually open new doors to relief from a large array of illnesses.

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Current Status and Prospects for Cannabidiol Preparations as New Therapeutic AgentsDownload

This paper is also stored here:     http://bit.ly/32HVVpc    inside the CED Foundation Archive

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Benjamin Caplan, MDExtensive Cannabis Studies Underway Globally
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Pre-clinical Evidence for Analgesic Effects of Cannabis Doesn’t Match Human Trial Results

October 18, 2019 , , , , , , , , , , , , , ,

Current evidence of cannabinoid-based analgesia obtained in preclinical and human experimental settings

In Summary:

Pre-clinical animal models of pain provide a wealth of data supporting the pain-relief capabilities of cannabis; however, reproducing this data in human clinical trials has proved difficult. Data from the animal pre-clinical trials point to cannabinoids reducing stress responses and pain-evoked stress, desensitizing pain receptors, and increased pain sensitivity in animals that lack cannabinoid receptors. However, human trials present conflicting results: several studies have shown dose-dependent relationships, and in the current review this was experienced by many participants, wherein lower and medium doses provided pain relief, but higher doses triggered increased sensitivity to pain. Controlled studies may show a lack of impressive pain relief effects, personal reports of pain relief associated with cannabis use are nearly universal in retrospective reports. This suggests that there may be an important effect on well-being or mood, rather merely sensory pain. Furthermore, the relieving effects of cannabis appear to impact men and women differently.

Dr. Caplan and the #MDTake:

Additionally, much of pain relief is subjective, in both sensation, description, and inside the study environment. The description of pain varies from person to person, and researchers may be asking the wrong questions to the right people or the right questions to the wrong people. In fact, a growing perspective is that this mismatch may be more common and more pronounced than previously recognized. The makeup of pain is also quite complicated. For instance, a limb might hurt, but if there is swelling or tenderness nearby, those may amplify the discomfort. How can we take the full picture into account in the form of helpful data points? What of the emotional or psychological impacts of pain? Is it even possible that such things can be fully understood, let alone measured reliably? Assuming that emotional phenomenon or stress/suffering can be conveyed to research scientists, how can we ever hope to compare one person’s experience to another’s? For example, one would imagine that frustration associated with the pain experienced by a venerable world war veteran, who has previously endured tremendous and complex pains and associated psychological trauma may be quite different from someone who has never experienced a particular pain before.

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Current evidence of cannabinoid-based analgesia obtained in preclinical and human experimental settingsDownload

This paper is also stored here:    http://bit.ly/2P1v7MI     inside the CED Foundation Archive

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Benjamin Caplan, MDPre-clinical Evidence for Analgesic Effects of Cannabis Doesn’t Match Human Trial Results
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Many Chronic Pain-Related Cannabis Studies Lack “High-Quality” Evidence

October 16, 2019 , , , , , , , , , , , , , ,

Cannabis-based medicines for chronic neuropathic pain in adults (Review)

In Summary:

In a recent Cochrane meta-analysis of studies investigating the use of medical cannabis for chronic neuropathic pain management, the authors determined that no results were what they could consider “high quality.” All data which related to degrees of pain relief, adverse events, and “Patient Global Impression of Change” were largely of very low or low quality, with some outcomes being of moderate quality. The meta-analysis concluded that no existing evidence backs up the use of cannabis for chronic neuropathic pain; however, the quality of evidence examined highlights the need for more controlled studies.  

Dr. Caplan and the #MDTake:

Depending on the system of organization one prefers, pain can be divided up into different subtypes. For one system, it’s three subtypes: neuropathic, nociceptive, and “other.” For another system, pain can be organized by timing (sharp, acute, chronic, breakthrough), location (bone, soft tissue, nerve, referred, phantom), or by the relative system (emotional, cancer, body.) This review discusses the subtype category of “neuropathic pain” as a means of grouping pain to study. The measures used to assess the pain are as subjective as the categories themselves. Clearly, compounding the two subjective divisions is unlikely to produce “high quality” data, but it is a misleading interpretation to take away that there is no good quality information to glean from the observations this review organizes, and also a misinterpretation to jump to an idea that cannabis is not helpful. Rather, given the statistical tools we currently use, and the subjective systems of understanding pain are not well-matched to translating the effects of cannabis on pain into this type of data.

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Cannabis‐based medicines for chronic neuropathic pain in adultsDownload

This paper is also stored here:    http://bit.ly/31mpiMi     inside the CED Foundation Archive

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Benjamin Caplan, MDMany Chronic Pain-Related Cannabis Studies Lack “High-Quality” Evidence
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Spinal Cord Injury and Severe Traumatic Brain Injury Patients Use Cannabis to Manage Symptoms

October 16, 2019 , , , , , , , , , , , , , ,

Cannabis Use in Individuals with Spinal Cord Injury or Moderate to Severe Traumatic Brain Injury in Colorado

In Summary:

Spinal cord injury patients report that medical cannabis helped them alleviate many symptoms of their injury including spasticity, pain, sleep disruptions, stress, and anxiety. Traumatic brain injury patients list their reason for use as reducing stress/anxiety and improving sleep. Both groups of patients reported recreational use prior to and following injury for a variety of reasons.

Dr. Caplan and the #MDTake:

Healing from traumatic injuries is never solely a matter of local tissue changes. The injured tissues, and the experience of being injured create ripple effects which can disrupt multiple other organ systems, and the entire experience of normalcy. A chemical stress response is one of the most common (and often adaptive) responses to an injury, but the burden of stress, adapting to a new illness, and associated loss of normalcy and sleep can be disastrous to the process of healing. As anxiety and sleeplessness snowball into daily problems themselves, a kernel of injury sometimes amplifies to become a life-altering change.

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Cannabis Use in Individuals with Spinal Cord Injury or Moderate to Severe Traumatic Brain Injury in ColoradoDownload

This paper is also stored here:   http://bit.ly/2IXaXzP      inside the CED Foundation Archive

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Benjamin Caplan, MDSpinal Cord Injury and Severe Traumatic Brain Injury Patients Use Cannabis to Manage Symptoms
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Arthritis Sufferers Lead the Way for Advancing Cannabis as Pain Medicine

October 10, 2019 , , , , , , , , ,

A Weedmaps News piece, looking earnestly at cannabis and arthritis. As the title suggests, arthritis sufferers are, indeed, leading the way for advancing cannabis as pain medicine.

https://news.weedmaps.com/2019/10/arthritis-sufferers-lead-the-way-for-advancing-cannabis-as-pain-medicine/

“We know cannabis is a powerful anti-inflammatory agent that functions differently from other drugs like Tylenol, Ibuprofen, steroids, or the biological options that work on the immune system and can present severe side-effects,” Caplan told Weedmaps News. “We don’t see that w/ cannabis”

“There is still not enough of what modern medicine calls the gold standard- randomized trials or review trials that collect multiple studies – but anecdote is not meaningless,” Caplan said.

“Stories we hear from individuals are very meaningful and worthwhile,” Caplan said. “We live in a scientific culture that thinks we should discount anecdotes and only pay attention to the highest quality data, which I think is misleading and not fair.”

Benjamin Caplan, MDArthritis Sufferers Lead the Way for Advancing Cannabis as Pain Medicine
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Cannabis Use for Medicinal Purposes is No New Phenomenon

October 9, 2019 , , , , , , ,

Article Title:

Cannabis sativa: A comprehensive ethnopharmacological review of a medicinal plant with a long history

In Summary:

Although medical cannabis has only lately become more popularized, its use dates back to as early as 3,000-10,000 B.C. According to evidence in ancient texts and glyphs, Cannabis sativa was used to treat fatigue, rheumatism, and malaria, as well as numerous other common maladies. Around 60 B.C., Assyrian clay tablets and Egyptian Ebers Papyrus document ancient Egyptian women using C. sativa for pain management and to improve their mood. More recently, nineteenth-century English doctors prescribed cannabis to reduce pain, inflammation, nausea, and seizures, and to soothe difficulties of menstruation. In a shock to the human historical trend, both England and the United States moved to prohibit its use in the 1930s, creating steep barriers for its therapeutic use, and an enduring smokescreen for the memory of its historical continuity.

Dr. Caplan and the #MDTake:

The history of cannabis use is often shocking to modern consumers, who have grown up hearing the biased views of the 20th-century leaders. A testament to the powerful reach of political propaganda, even medical schools adopted the rhetoric of the age, without second-guessing. Fortunately, the march of oral history and social spread of cannabis use perpetuated a very different, much less menacing tale. Now, it is time for the sophistication of modern medicine to catch up and lift cannabis understanding and consumption to modern medical standards.

History of Cannabis YouTube playlist: bit.ly/CEDCannabisHistory

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Cannabis sativa: A comprehensive ethnopharmacological review of a medicinal plant with a long historyDownload

This paper is also stored here:    http://bit.ly/2OtLmC9     inside the CED Foundation Archive

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Benjamin Caplan, MDCannabis Use for Medicinal Purposes is No New Phenomenon
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Could Inhaled Cannabis Be More Effective to Relieve Pain than Oral Cannabinoids?

October 4, 2019 , , , , , , , , , , ,

Cannabis for Chronic Pain: Challenges and Considerations

In Summary:

Comparisons between the use of inhaled cannabis plant versus pharmaceutical-grade oral cannabinoids demonstrate an advantage of inhalation over oral delivery. Conditions for which inhalation has provided superior over oral consumption include:

HIV, diabetic neuropathy, post-herpetic neuralgia, complex regional pain syndrome, spinal cord injury, traumatic neuropathic pain, multiple sclerosis, and cervical disk disease.

An important note: patients consuming cannabinoids orally are more likely to withdraw from studies due to negative side effects and lack of efficacy. Also, edible cannabis may compete, amplify, or have effects delayed, when interacting with other ingested foods and drinks, A major advantage of inhalation is the opportunity for patients to titrate, or easily test varying dosages at home, with reasonably rapid feedback. On the other hand, dosage adjustments for oral food-borne cannabinoids are much more complex, and cannabis in the form of oral pharmaceutical-products may require a doctor visit and a new prescription.

Dr. Caplan and the #MDTake:

In the clinic, there seems to be a great divide in the population, a group of patients who simply adore the edibles (often in low-dose candies, low-dose chocolate, or titrated tinctures), and a group who use inhalation, almost exclusively. There are also some who are discovering topicals (salves, patches, lotions). There is a growing number of patients who use each of these methods with intention, related to their timing of onset and their duration of action, but this requires education, practice, and a degree of sophistication in use that is relatively new to the industry.

As with most consumption, medicinal or not, it seems common for individuals to find a method that they enjoy and stick to it. Interestingly, in recent years, the US cannabis industry has evolved in a wild growth phase. As it has embraced a dynamic landscape, with increasing competition from all sides, including new stores and product offerings popping up all the time, there seems to be a growing openness, in consumers, to trying new products and exploring new offerings. Coincidentally, this openness to change and the unfamiliar happens to mirror one of the core neurobiological functions of cannabis in the brain, as seen across the neuropsychiatric and neuroimaging cannabis literature.

How exciting to imagine a future medicine that may help consumers to be more open to change?

View this review (yellow link) or download:

Cannabis for Chronic Pain: Challenges and ConsiderationsDownload

This paper is also stored here:    http://bit.ly/2OmdM0S     inside the CED Foundation Archive

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Benjamin Caplan, MDCould Inhaled Cannabis Be More Effective to Relieve Pain than Oral Cannabinoids?
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