Marijuana: State and City Officials Admit Sales System Incriminates Pot Buyers, Attorney Says

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Last week, we previewed a court hearing in a lawsuit declaring Colorado's marijuana sales taxes illegal and unconstitutional.

Attorney Rob Corry asked for a temporary restraining order to halt tax collection while the matter is considered, but Denver District Court Judge John Madden rejected that request at Friday's session. The ruling disappoints Corry, but he's optimistic about the case's future and feels plenty of interesting information came out -- including, he says, the admission by city and state reps that anyone buying marijuana in Colorado is incriminating themselves in the eyes of the federal government.

See also: Marijuana Advocates Say Special Taxes Lawsuit Could Overturn All Pot Licensing Regs

As Corry told us in June, when the suit (on view below) was originally filed, "The primary cause of action is based on the Timothy Leary case before the U.S. Supreme Court:" -- a reference to 1969's Leary v. U.S. "That case struck down the Marihuana Tax Act of 1937 after Leary successfully argued to the court that payment of a marijuana tax was a violation of the Fifth Amendment right to avoid self-incrimination."

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Rob Corry.
Arguing against this interpretation were representatives from Colorado Attorney General John Suthers's office -- and according to Corry, "it was fascinating to see them basically discounting the importance of federal law and minimizing the federal violation, which is a major shift in the way they've looked at marijuana. And in my opinion, it's a positive shift that's been a long time coming. For years, they've argued that federal law trumps our state system and that our state system was somehow invalid because of federal law. But at least selectively, they're not really embracing federal law anymore."

The operative word in the last sentence is "selectively." Corry notes that a different interpretation is at the heart of the AG's approach to Dish v. Coats, a case before the Colorado Supreme Court. At the center of this controversy is Brandon Coats, a quadriplegic who was fired from his position with DISH for failing a drug test even though he's a licensed medical marijuana patient -- and in this instance, the state has argued that because marijuana remains illegal at the federal level, Coats's firing was lawful despite his cannabis use being legal in Colorado.

In Corry's view, "the attorney general is arguing one thing in the employment context -- saying this poor guy in a wheelchair can be terminated for his off-the-job marijuana use. But on the other hand, they say it doesn't matter that dispensary clients are incriminating themselves under federal law by paying taxes. So I think it is a selective reading of federal law and inconsistent on the part of the attorney general."

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Brandon Coats and his attorney, Michael Evans.
Corry adds that "both the State of Colorado and the City of Denver contended that the licensing and registration systems that are in place are already self-incriminating. Their position, which I think actually has some merit and the judge embraced somewhat, is that a temporary injunction against taxes wouldn't help because these entities and people are already sufficiently incriminating themselves. That does have the ring of truth to it, and we've been talking to clients and others about it, deciding if that might be a direction this needs to go in."

If this tack is successful, could it undermine Colorado's entire regulatory apparatus related to marijuana?

"I don't think it could take down the whole system," Corry replies. "What we would do is revert to what we had before July 1, 2010" -- the day when House Bill 1284, the measure that established the state's current rules for overseeing medical marijuana, took effect. As such, he goes on, "hundreds of dispensaries all over the state, and hundreds of grows all over the state, would all be operating legally under state law, and state and local governments couldn't take them down, because they were fully in compliance with the then-existing constitutional and local zoning laws."

Such an outcome would be okay by Corry, who dismisses many of the current statutes as "regulation for the sake of regulation. None of them have anything to do with the quality of marijuana, protecting the public, safety, efficiency -- and you can go on down the line. Banning previous felons: Who does that help? A two-year residency requirement for owning a dispensary: That's meaningless. Vertical integration: pointless."

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Colorado Attorney General John Suthers.
At this juncture, Corry isn't sure which direction the lawsuit will take moving forward -- and there's a scenario that could half its progress entirely. "The judge has in his hands motions to dismiss from the state and local defendants," Corry acknowledges.

In his view, however, "I think it looks pretty solid that we'll move past the motions to dismiss and litigate the case on its merits."

Which could at least potentially be far-reaching. Here's the aforementioned complaint. Note that the the suit includes links to numerous articles and posts, with Westword among the news agencies cited.

No Over Taxation v. John Hickenlooper Complaint

Send your story tips to the author, Michael Roberts.

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57 comments
Jay Polo
Jay Polo

Eventhough it is federally illegal i dont see feds kicking down your door over a dime bag they go after the big fish the problem is that your job can descriminate against responsible pot smokers via drug tests...someone that smokes a joint to help them sleep for a big day at work gets fired where as the guy that goes out partying on a week night and calls in sick the next day because he is hungover gets to keep his

ethernot
ethernot

"For years, [CO prosecutors] argued that federal law trumps our state system and that our state system was somehow invalid because of federal law."

That was before the bucks started rolling in; the state is now a vested interest.

Ancient Yaqui brujo saying: "Money speaks".

Paul Williams Jr
Paul Williams Jr

Just like the slavery issue this country is obviously divided

Sumibraxis Dei
Sumibraxis Dei

Yeah I know mates, the feds think and pretend they have more power than they actually do, and will continue to do so until we start telling them to fuck off

Lane Miller
Lane Miller

This is incorrect, if I remember correctly. The Supremacy Clause says: Constitution > Federal law > State law. I think the better way to look at it is, as another poster said, the Feds simply don't have the interest (and perhaps more importantly, the manpower) to enforce Federal drug law without State cooperation, which they no longer have.

Travis Gann
Travis Gann

The gov can go fuck itself we voted this in and if the whole country had the ballot they'd legalize too

Kendra Bell
Kendra Bell

No because if they tried to charge you, I think it technically would constitute entrapment.

John Pinnick
John Pinnick

No. And even if I am I am willing to pay the penalty for the greater cause.

Michael Hartman
Michael Hartman

The feds can puff their chests all they want. we have the numbers and states have the power when it comes down to it. And they know it. Thus the constant overreach- it's the act of an insecure ex-wife living off alimony.

Joe Rumpeltes
Joe Rumpeltes

To bad they don't have any way of tracking who buys pot because 99% of sales is cash.

Tai Kahn
Tai Kahn

... and this system incriminates the state taking our tax dollars from a federally illegal activity too. It would be a big ugly ACLU cluster fuck. Don't see individuals being targeted that way.

G-boy Slpmg Gomez
G-boy Slpmg Gomez

Its legal now but u still cant smoke outside wen ur just chillin they made it like that so the government can make more money off us from the weed an from the arrest off it from ppl smoking an driving an just smoking outside of ur house think bout it

Che Weller
Che Weller

Sumibraxis Dei yes those are the stated "rules" but to be honest. When do the feds follow rules?

Chelsea Dianne
Chelsea Dianne

Who cares? Why would anyone ever care? Pointless post.

Sumibraxis Dei
Sumibraxis Dei

Feeds can only intervene when state lines are crossed

Dalton Brown
Dalton Brown

Facts say yes, they also say they've known the medicinal value of the plant and made it illegal since.

DonkeyHotay
DonkeyHotay topcommenter

DESTROY the Greedy Big $$ Dispensary Cartel monopolies!


Revert back to the pre-2010 system of PRIVATE Individual Patients, Growers and Caregivers that functioned for over 10 years WITHOUT meddling from the MMED jackboots, myriad meaningless regulations and abusive parasitic taxes.


FREE the WEED!

DonkeyHotay
DonkeyHotay topcommenter

... yet not a single state has legalized it.


RobertChase
RobertChase topcommenter

@GuestWho -- retail dispensaries; medicinal cannabis is not subject to those taxes.

DonkeyHotay
DonkeyHotay topcommenter

... you're not the sharpest tool in the shed, are you Joe?

RobertChase
RobertChase topcommenter

Marijuana is like murder now in Colorado, but you don't know it.

RobertChase
RobertChase topcommenter

@DonkeyHotay The suit is about not paying taxes specific to cannabis, which medical dispensaries do not charge -- you must not understand it; at least one of the plaintiffs appears to be confused too.

GuestWho
GuestWho topcommenter

@DonkeyHotay "DESTROY the Greedy Big $$ Dispensary Cartel monopolies!"  -- Sounds good!  Most real patients that can't afford the prices at dispensaries...those prices are set for rec users or perhaps patients using miniscule amounts.  Are legit patients really paying $500 or more a month at dispensaries on buds, hash, edibles, and oils when they can produce the same at home for less than $100 a month?


Are Rob Corry's antics finally proving useful?  

GuestWho
GuestWho topcommenter

@RobertChase  "retail dispensaries; medicinal cannabis is not subject to those taxes"


So you admit that the recreational marijuana law you supported and voted for is "funding the anti-marijuana militia"?


P.S.

Medical marijuana centers are "retail dispensaries."


retail = "sale of goods to the public in relatively small quantities for use or consumption rather than for resale"

DonkeyHotay
DonkeyHotay topcommenter

@RobertChase ... so Medical pot is tax free at dispensaries? ... and there are no marijuana specific massive FEES and LICENSES associated with medical pot?


Who knew?


Why are you such an obtuse ignorant cunt?


DonkeyHotay
DonkeyHotay topcommenter

@GuestWho "Are Rob Corry's antics finally proving useful?  "


Jah willing! ... even a loose cannon fires in the right direction occasionally.



RobertChase
RobertChase topcommenter

@GuestWho Your problem perceiving the forward direction of time persists -- the unconstitutional sales tax surcharges were imposed a year after the Amendment providing for the retail sale of cannabis.  Had people who use cannabis organized against the Establishment media's lies that "Colorado legalized marijuana" and that the State was implementing the Amendment, the sales tax surcharges might not have passed.

RobertChase
RobertChase topcommenter

@DonkeyHotay Patients pay only sales tax, assessed on all goods dispensaries sell, and dispensaries don't just sell federal contraband.  There are "marijuana specific massive FEES and LICENSES associated with medical pot", but patients don't pay for any of them, and registration as a patient with the CDPHE is supposed to be confidential (although the State is now openly flouting the confidentiality requirements of the Constitution by allowing "independent contractors and other agencies" access to what by law "authorized employees of the state health agency" are supposed to handle.

DonkeyHotay
DonkeyHotay topcommenter

@RobertChase "the unconstitutional [sic] sales tax surcharges were imposed a year after the Amendment providing for the retail sale of cannabis"


The VOTERS overwhelmingly approved the MASSIVE TAXES on Pot that the clueless stoners who supported A64 baited it with.


Obey the Will of the PEOPLE !!


TAX THAT SHIT!


DonkeyHotay
DonkeyHotay topcommenter

@RobertChase "There are "marijuana specific massive FEES and LICENSES associated with medical pot", but patients don't pay for any of them"


Oh, they pay alright.



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