Cannabis Lawsuit Calls Out High Taxes & Problems With Social Equity Programs

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State-legal cannabis is still ignoring the elephant in the room. According to California and Oklahoma’s recent headlines, the culprit is high taxes. Recently, both states have had local businesses filing a lawsuit against the state or the state’s cannabis program itself.

Early last week, Catalyst Santa Ana dispensary owner, Elliot Lewis, posted a video to his Instagram account calling his state’s legislators to lower taxes. he California company filed a lawsuit against the Department of Cannabis Control alleging that taxes were purposely set higher. As a direct result, the legal market has to compete with the illicit market; a problem the industry as a whole has struggled with.

“I want to be clear- our goal is to outline a problem that the state has created by failing to work with the cannabis industry on fair taxes… The cannabis industry has the biggest potential for job growth and good-paying jobs with tons of upward mobility since the tech boom.”

-Elliot Lewis, CEO of Catalyst Cannabis Co.

Beard Bros Pharms cites huge numbers of “burner dispensaries” in Catalyst’s lawsuit. They describe these as “the types of operations that continue to supply the illicit market by transiting products grown in full legal compliance into the illicit market via a middle man.” The lawsuit claims that the state imposed excessive taxes and created a fake social equity program to keep most businesses out of the legal market.

In his post, Lewis specifically cited a “lack of transparency and oppressive policies” and wants to “illuminate their incompetence” under oath.

A CONSISTENT PROBLEM

At the same time, Oklahoma Growers are caught in a web of lawsuits after the OMMA revoked 300 licenses tied to a single person. Jones Brown Law allegedly forced an employee to serve as a third-party resident on the applications of some of their clients. The former secretary, Kathleen Windler, filed after being criminally charged with the illegal cultivation of marijuana. Windler is now suing Jones Brown for an unconfirmed amount annually as well as requiring them to “defend and indemnify” her from potential future litigation related to the situation. The suit alleges the law firm “profited dramatically” from offering her as a solution to clients. 

Caught amid the firm and Windler’s actions, however, are more than 450 dispensaries. The businesses all sought legal counsel from Jones Brown; but we’re offered expedited access to the Oklahoma Cannabis Program by using Windler to satisfy the in-state requirements. The agreements indicated that Windler would not receive profits from the companies and would not be involved in daily operations. That all ended in August when Windler surrendered her ownership of every business due to her charges. A letter obtained by News 9 said; “your medical marijuana business must cease operations immediately’ with no further instruction from Windler, Jones Brown, or even the OMMA.

The law firm responded by email to the story:

“What has remained constant is the commitment of our office to full and transparent adherence… our participation in the Oklahoma medical cannabis industry embodies our full commitment to transparent business licensing and compliant business operations for all licensed entities to ensure that this now-billion-dollar industry operates in a safe and legal manner.”

ACCESSIBILITY & ACCOUNTABILITY

As a whole, more than 450 licenses in Oklahoma could be affected by this lawsuit. In California, the number is unknown. Regardless, it presents a problem that people have been refusing to acknowledge. Legislators drag their feet on proper laws for cannabis while collecting the revenue from it. Taxes keep businesses out and create issues such as these. They somehow continue to be unsolvable by the powers that be; clipping the legs off cannabis while expecting perfectly compliant results. At the end of the day, there’s a consistent problem and high taxes are fanning the flames. 

You’ve been hearing the magic word for almost a decade and its accessibility. A decent majority of the issues in cannabis stem from it directly; whether it’s from getting into the industry or obtaining the product itself. With patients who can’t afford legal medicine, banned hashtags preventing legal businesses from even finding consumers, on top of all the tax issues involved in the mound of obstacles, you gotta give cannabis a break. After all the back and forth with the state, however, where is the breaking point? As Elliot reinforced, this is the result of the problem, not the cause. 

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Joycelin Arnold

Joycelin Arnold

Dating back to 2012, Joycelin has wrote for various online Video Game publications covering events and launches regularly. Cannabis has been with her throughout the journey, however. She officially joined cannabis industry in 2016 as a budtender and begin writing for brands and magazines in 2017. Outside of cannabis, she writes science fiction with one published novel, Siren, so far.

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