Business
Northern Windfall: Wisconsin Residents Spend Millions on Pot in Illinois
Both recreational and medical cannabis are illegal in Wisconsin, forcing residents to find their weed elsewhere.
For the state of Illinois, a thank you might be in order for its neighbors to the north. A newly released analysis says that Illinois collected millions of dollars in tax revenue from Wisconsin residents who crossed the border to buy legal marijuana.
The two Great Lakes states border each other––Wisconsin abutting Illinois to the north––but they have very different laws on cannabis.
Illinois legalized recreational marijuana in 2019, and a state-sanctioned adult-use market launched at the beginning of 2020. The state also legalized medical cannabis in 2013.
Wisconsin, meanwhile, is one of the last remaining states where both recreational and medical marijuana are still illegal.
Democrats in Wisconsin are determined to change that––including one lawmaker who released an analysis last week showing that the state is losing millions in potential tax revenue to Illinois.
The report from Wisconsin’s Legislative Fiscal Bureau “estimated that $36.1 million of Illinois cannabis tax revenues in fiscal year 2022 were attributable to sales of cannabis made to Wisconsin residents.”
The analysis “assumes that all sales to out-of-state residents in counties bordering Wisconsin were made to Wisconsin residents, which are estimated to constitute 7.8% of total Illinois cannabis-related tax revenue,” according to the report, which said that of “the sales made in counties bordering Wisconsin, $121.2 million, or 50.6%, of these sales were to out-of-state residents.”
“Relative to marijuana sales statewide, approximately 7.8% of total cannabis sales revenue in Illinois came from sales made to out-of-state residents in counties bordering Wisconsin in calendar year 2022,” the analysis said.
The report came at the request of Democratic state Sen. Melissa Agard, who has championed marijuana legalization proposals in the Wisconsin legislature for years.
Agard, the Democratic leader in the state Senate, expressed frustration at the findings.
“It should upset every Wisconsinite that our hard earned tax dollars are going across the border to Illinois. This is revenue that could be going toward Wisconsin’s public schools, transportation infrastructure, and public safety. Instead, Illinois is reaping the benefits of Republican obstructionism and their prohibitionist stance on marijuana legalization,” Agard said in a statement last week.
Republicans hold majorities in both chambers of the Wisconsin legislature, as they have for more than a decade, which has diminished the chances for legalization.
Wisconsin Democrats like Agard, and the state’s governor, Tony Evers, overwhelmingly support an end to the prohibition.
“Republicans’ continued refusal to legalize marijuana is fiscally irresponsible. Wisconsinites paid more than $31 million – just in taxes – to Illinois in 2022. Wisconsin’s loss of potential revenue is even larger if we include taxes paid to Michigan, as well as Minnesota in the near future. Wisconsin is losing out on significant tax dollars that could be used to make our communities stronger, safer, and healthier,” Agard said in the statement.
“We are an island of prohibition and the people of our state are hurting because of it. As seen in our neighboring states, legalizing marijuana for responsible adult usage will generate significant revenue for our mainstreets, safely regulate the existing illicit market, reinvest in our agriculture and farming heritage, support entrepreneurship, and address the massive and egregious racial disparities from marijuana prohibition,” Agard continued. “The fundamental aspect of our job as legislators is to listen to the people we represent. The people of Wisconsin have been asking the legislature to take up common sense measures that will push our state forward. We know that legalizing cannabis for responsible adult use is wildly popular among Wisconsinites, including the majority of Republicans.”
Source: https://hightimes.com/news/northern-windfall-wisconsin-residents-spend-millions-on-pot-in-illinois/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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