Michigan's adult-use launches with big crowds; Jim Marty and Larry Mishkin talk about the big day and about Illinois and Missouri's pending January launch. They also talk about an interesting developments with the recent 280E court ruling. They finish the show with Larry's review of the Warren Haynes Chicago concert. Produced by PodCONX https://podconx.com/guests/larry-mishkin https://podconx.com/guests/jim-marty https://podconx.com/guests/rob-hunt
Michigan's adult-use launches with big crowds; Jim Marty and Larry Mishkin talk about the big day and about Illinois and Missouri's pending January launch. They also talk about an interesting developments with the recent 280E court ruling. They finish the show with Larry's review of the Warren Haynes Chicago concert.
https://podconx.com/guests/larry-mishkin
https://podconx.com/guests/jim-marty
https://podconx.com/guests/rob-hunt
Jim Marty: [00:00:35] Welcome to the Cannabis Show, everybody. Jim Marty here from snowy Colorado. And I've got my partner, Larry Mishkin up in Chicago.
Larry Mishkin: [00:00:45] H.m., how are you doing today? Good.
Jim Marty: [00:00:46] How's things in Chicago holding windy and a little stressful as we get down to the wire here on the the application period for the adult use dispensary applications. Those are all due in less than 30 days.
Jim Marty: [00:00:58] Now, how's all that going up there? The timetable is going to be met.
Larry Mishkin: [00:01:03] You know, I think still I'm sure we're going to have, you know, our standard share of last minute scrambling. It's it's almost impossible tonight. Sometimes, sometimes. But I'd like to think that most of the groups that I'm working with are pretty well positioned right now to be on schedule and have everything done with enough seats built in so that if we have any last minute issues, we have a little bit of time to work out.
Jim Marty: [00:01:24] Some of the things that have been on the news about Illinois this week is that many of the cities and towns are opting out of having adult use dispensaries.
Larry Mishkin: [00:01:34] So you're seeing on the ground up there, it's becoming more and more of a problem as more and more communities are exercising their right to opt out. It's really creating problems in a number of different ways. But the biggest problem that it's creating are for those currently licensed medical dispensaries that have a right to apply for a license to make their facility a dual purpose facility, they can handle both medical and adult use. But now what's happening is these communities are saying we're not going to allow adult use, even though the medical dispensaries already in the community. So they're being deprived of their right to exercise. Tick, tick, tick. Turn into a dual purpose dispensary. It's bad for them. It's bad for the state because that's one large adult use dispensary we're going to have on January 1. Right now, I believe there might be about 20 of them that have been formally approved by the state and other in various stages of build out and getting prepared. But that's 20 out of 55 and that's going to be met with with it. When everything starts on January 1st, these are going to be the places where people are going to have to go through what is going to get adult use. And we're all hoping everything's going to be ready. However, we just have to do a recall that was thrown into the mix here. Gibler The things, you know, we've talked about is the importance that the social equity component, but what an important role that plays overall to the Illinois program.
Jim Marty: [00:02:59] And right. Glad I'm. Well, she's going to say yes. Some of the things that have been on the news about the social equity program is even though they're going to allocate some of the tax revenue to social equity programs, those programs and how that money is going to be spent have not been clearly identified.
Larry Mishkin: [00:03:18] That's true, too. Unfortunately, that's typical for long delay. So there's not a whole lot we could do about that. That's the bigger problems that we're running into, of course. Are the expected rate. Everybody is trying to figure out a way to scam the system, to pair up with the social equity applicants. The wife says the social equity applicant has to own 51 percent of the company. They have to have control of the company in order for you to qualify for the social equity point. A lot of people are looking for ways to kind of contract around that, figure out other ways to do it. And so one of the older men of the Chicago City Council got a little upset by what was going on. And he has now proposed an ordinance to be considered by the Chicago City Council, or at least one of the committees on the Chicago City Council to suspend commencement of adult use dispensaries in the city of Chicago for additional six months after January 1st. I don't think that I don't think it's going to have the support that it needs to pass, but it's to the fact that there are people that are not entirely pleased with the way things are going. It could be really incumbent upon the state to do whatever it can to try to satisfy all the various groups that show people that they could do this. It'll be legitimate and that know be that. But, you know, it's going to work to the benefit of people like they say it is. You know, I think a lot of people are for it. I would certainly hope that would be the case. There's just a lot of concern as to whether that's the way it's really going to play out or not.
Jim Marty: [00:04:45] Well, it's going to be interesting to see switching over to Missouri. We should be hearing who of the applicants will be awarded licenses in Missouri. To have it done by the end of the year. But there is talk that there might be the first or second week of 2020.
Larry Mishkin: [00:05:02] They've already extended the deadline. So what I shaded out is they obviously got a lot of applications to be good at. Much prefer that they take more time and review it carefully, but just try to skip through it so well. We have to award by a certain date.
Jim Marty: [00:05:17] Right now, a week or two is not going to make any difference in Missouri. The. This is the start of their medical program, they're so unlike Illinois, where they've already got the medical cultivation in place for their adult use.
Jim Marty: [00:05:31] Missouri starting from scratch, you know, they're going to be six months to eight months at least before people have their first medical harvest in Missouri. Buildings to build. They've got lights to hang. They've got staff to play.
Larry Mishkin: [00:05:43] And to care is exactly right. It does take time. And, you know, it's interesting going back to what you were saying about the community, sometimes it's hard for the community to understand that as well. You know, they kind of have this image of everything coming together all at once magically on a certain day. They've got those are the communities that are here are willing to allow adult use to take place. And actually, you know what? One of the areas it's it's it's funny. If it's sad or if it's all the I've started going to some of these community meetings. Now they associate Mike Brooks, who works with the I lived out at West Chester and they were having their community meeting to make a determination as to whether or not there were going to allow adult use because the group it indicated they wanted to be licensed to operate a dispensary of the community. But what was really amazing to me, Jim, was the level of misunderstanding and misinformation that was being conveyed by the opponents to the people who wanted to say no adult use. You're really kind of shocked you in the sense that it was it was just shy of being reefer madness type of arguments. There were well, that I went I Google and I found out that there's some people who say it can cause schizophrenia. And I don't Google and I found out that all the kids started smoking a lot more. And I went to Google and I found out that the rate of auto accident deaths went up.
Larry Mishkin: [00:07:01] The council was very nice and ultimately gave me a chance to speak. You almost don't know what to say in that situation, right? Because you have to be polite. You have to be respectful. You know, it's kind of almost, you know, try to argue against utter nonsense. And luckily, this this community board was very willing to listen to what I had to say. And that fact was asking for follow up. I'll give her a cheap a shameless plug here really quickly to Parmitano, who's one of the assisted officers for normal. And she has a book out with two other guys whose names I should know what a double re bumper sticker. It's called Marijuana. Is it so bad? Why is everybody driving us to drink and excites about all the hypocrisy that we have and all the misunderstanding that it goes about? It debunks these arguments one by one and it provides full citations, everything they're saying. So you can actually read the argument, go see what the sources. And then you can go use the argument adult that you've got it backed up, that it's a wonderful book. This this community asked me that I mentioned to them, they said, could you please send us a copy? We'd like to see it. I think is you have a community that's willing to take that kind of time and show that kind of interest outside the books all day long.
Jim Marty: [00:08:12] Right. Well, few things heal here in Colorado. We're still kind of the leading state in the country for legal adult use and traffic fatalities are flatlined. I think we're going to come in just under six hundred day tallies this year in Colorado, which is the same as has been the last five years or so. So no spike in traffic utilities here in Colorado. I don't have the statistics at my fingertips, but my understanding is teenage use in Colorado is down or more flat, but not rising.
Larry Mishkin: [00:08:45] Every state that has introduced adult use, every state, teen age, smoking has died down.
Jim Marty: [00:08:51] Well, it makes it a little harder for them to get in the corner dealer, as we discussed on past podcasts.
Larry Mishkin: [00:08:57] Right. Nobody wants to smoke the same thing. Their mom is smoking. So, you know, I get it makes sense to me. It loses.
Jim Marty: [00:09:04] It loses its rebelliousness. Yeah. You know what's really up among teenagers as vaping?
Jim Marty: [00:09:11] And that's not necessarily marijuana, these feelings. Nicotine.
Larry Mishkin: [00:09:15] Right. There's all sorts of stuff going on with they think since we all last time I did if anybody saw there was a new update on the vaping crisis and now did it in addition to Vedomosti acetate, which they're still saying should be used, it is a good they now think they've discovered a possible link between the illnesses and the battles that are used to soldiers, the joints in the body of the data. And that was that they had feet up, that they may be causing those battles to go off gases. And they're suspecting that that may now be the cause as well, that the battery is obviously the crisis is real. And there's people out there who have got very ill. And every now and then another person unfortunately succumbs to it. It dies. But I think that this type of research and study is really important because we've got to get this fixed so that people don't get sick. The people have to understand this is not the excuse. They've been looking forward to say no, Beral wanted a community. This is not a marijuana issue. It is an issue that did pass marijuana because of the technologies that it's been paired up with. But it's not a THC issue.
Jim Marty: [00:10:18] You know, whether you're a Democrat or a Republican. You have to take heart in Trump's President Trump's recent comments that he didn't want to ban vaping or vaping products because it would just lead to a black market.
Larry Mishkin: [00:10:32] Well, absolutely. He said, let me just say this to you and I do a very good job of talking politics. People can say whatever they want about President Trump and Lord knows it, but said this is the man who signed the bill that made up little of this country.
Jim Marty: [00:10:46] He is the first step down. It's going to that 180000 low level drug dealers out of prison this year.
Larry Mishkin: [00:10:52] No doubt about it. And, you know, white people get credit for the things they do, regardless of anything else you may do. I certainly give it credit for that. And I do like the way he handled the BP crisis because he's right. It's just going to drive everything back into the black market. And that's where the problem really exists in the first place.
Jim Marty: [00:11:09] Yes. And as I've said many times, this is not a partisan issue. Legal Cannabis for adults, medical Cannabis. There's plenty of libertarian Republicans as well as social conservatives who are against Cannabis. The Democrats also have plenty of issues too. Case in point is the Illinois situation we were already talking about on this.
Larry Mishkin: [00:11:33] But yes, I agree with everything you just said. Sometimes I go to the opposite direction with it. Right, which is that Democrats and Republicans all like to get high. Yes. I suppose for some people on both sides of the spectrum, there is a morality issue advised with it. There is a proprietary issue involved with it. And whether you or I agree with that or not, I get that. We've talked about how the Safe Banking Act out the House with huge bipartisan support. The Raupach Refah Amendment, which was a significant step taken to help Fertel, the G8 Dena. war backers of Republicans. Beruwala is a wonderful thing in that regard.
Larry Mishkin: [00:12:10] I love the way that it brings people together. It gives the mccarvel cause to fight for. And quite frankly, my hope is if you could find common ground that maybe it carried over and find some common ground on some of the other issues, which private ground would be a good thing.
Dan Humiston: [00:12:28] I want to take a quick break to thank you for listening to today's show as the leading Cannabis podcast network. We're constantly adding new Cannabis podcast to support our industry's growth. And that's why we're so excited to announce our newest podcast, The Cannabis Breakout. The show's about the thousands of Americans who remain in prison for violating Cannabis laws that have long since been overturned. The Cannabis breakout gives Cannabis political prisoners a voice. If you're a former Cannabis prisoner or have a loved one who is a Cannabis prisoner, we want to share your story. Please go to MJBulls.com and sign up to be a guest.
Jim Marty: [00:13:09] Moving on, I want to touch on a couple things before this podcast is over and talk some music. But before we do, as we come to the end of 2020, some very interesting tax court cases have come out. Larry, the proper name of that California case is the Northern California Small Business Company vs. the Internal Revenue Service or the commissioner of IRS. You know, what's interesting about that case is the dissent. So once again, the taxpayer laws to ease that upheld yet again in the federal courts. However, really good dissent by one of the judges.
Jim Marty: [00:13:47] I don't have his name right in front of me suggesting that tax rates in excess of 100 percent. And trust me, we see it every day. Every day. People are in excess of 100 percent tax brackets. We have some clients who have figured out how to be profitable, not getting all their deductions allowed. But for many of our clients and in Bridge West has several hundred Cannabis clients, as does Hoban law.. They find themselves in excess of a hundred percent tax brackets. Is that not an excess of fine or penalty under the Eighth Amendment? And one of the judges around that was his dissent. So then move that along to Harborside, who's appealing 11 or $12 million with a taxes related to to ADC. I'll hand it over to you, Larry, because you're the lawyer here and get your opinion on those two cases.
Larry Mishkin: [00:14:39] You and I have had this conversation before. We're taking as a rule that was really designed for an entirely different situation, trying to apply it into the Cannabis industry and never really been able to see all of the justification for any of it in the first place. But I think you're absolutely right. You know, when you talk about this issues that you're mentioning, if you're asking people to pay taxes on something that's, you know, greater than what they're what they do. That does begin to raise serious constitutional problems. And let me say this. The Jiaxuan or brothers are an interesting pair. And I know that there are some people in the industry who think very highly of them. There's other people in the industry who may not think it's highly of them. But as a lawyer, I will say this. They are indispensible and not just up, but some of these other groups that are fighting to their indispensible to the ultimate success of this industry, because without people who are willing to spend their own money to fight these battles for the good of the industry, we weren't just always harking back to the government's position and we would never get anywhere. Now, I don't know when they'll really get where they want to get this time around, but I got to take you for an account.
Larry Mishkin: [00:15:46] You made an excellent legal point. This is the way to rise off it created is that somebody writes a dissenting opinion at five cases later, all of a sudden, we have the majority accepting what was previously a dissenting opinion and that what does, in fact, swing back around in the direction where we wanted to go. Right. Right. Some of these judges just don't know. But after they hear two or three cases, they begin to see they see another judge who's figured it out but couldn't convince his partners. This is this is how do lives created, how judges over time gradually change their opinions. We've already made breached rates on 288, a service you put out on the front lines fighting for along with a lot of other people. And it's just a matter of fact. But we need the people who were willing to spend the money and the professionals who were willing to take those cases, because that's how we're going to solve this problem. It's a drop.
Jim Marty: [00:16:38] Yes. And it'll be very satisfying for me because it's seven or eight years ago. Explain this to a tax court judge. I believe it was in the alkan Grow the Fineberg case, which were some of the first Colorado tax court cases on two perfectly very simple example recently had a client who made $500000 in their adult use marijuana business in Colorado and their non deductibles were 1.5 million, which makes sense to them was, hey, I need you need to consult with me about how to get that number down. So in a year when they made $500000, they pay tax on two million dollars. Well, the tax on two million dollars at a 40 percent tax rate is about eight hundred thousand dollars. So in a year when they make five hundred thousand, they owe eight hundred Bridge West. We have several clients that owe. Over a million dollars to the IRS and they have no way of overpaying. So we're reaching out to try to get these cases settled on what the IRS calls a program where they'll say, okay, look at if you have the same facts and circumstances, you're going to get all these cases settled. Now, there was a case back in the 80s or maybe in the 1970s, if you remember, the master recording contracts, cases where they had all these tax shelters on master recording tapes back when they had videotapes and there was a total sham. A lot of people got suckered in and the IRS put out a program to get all these people to get their cases settled and get them on the path to making money. And the master tax cases again. So anyway, yeah, we got a lot of good things going on at this time. Hopefully Harborside will we'll be the big picture here and defeat to eat as we come towards the end. We should talk a little music.
Larry Mishkin: [00:18:23] Well, before we do, I just want to throw out one last thing on the Cannabis side. As long as we're talking about good news. Michigan formally kicked off its adult youth progress, right?
Jim Marty: [00:18:31] That's right.
Larry Mishkin: [00:18:32] And now you could go to Michigan. They have adult youth, not as you know, we expect a lot of places I don't know if you saw the news reports, but they showed the dispensaries with people like literally going around the block twice on a cold, snowy day or whatever it was. But people are like, oh, no, we're out, we're here. What other business has that kind of play itself given?
Jim Marty: [00:18:50] Well, we'll take that up on the next contest, which I hope to do, like next week from M.J. Blizzcon in Las Vegas. I'll be staying at the West Gate, which is the convention center. So I'm looking forward to getting out there and seeing the state of the industry here at the end of 2019. But you've got to see a recent one game show to close out with some musical news.
Larry Mishkin: [00:19:12] As a matter of fact, they did. And we spent a lot of time on this show talking about the dad, talking about Yassky trucks and rightfully so. They're all I mean, they're they're they're, though, the backbone of the jam bands industry. They're the people. We all love it. We want to go with. But we don't spend a lot of time talking about his ward heads. And I will tell you it right now, in my opinion, Warren Haynes is the greatest living rocker we have. They say he's the best guitar player, saying he has the best voice. But it's the stuff that this guy puts out, right. There's the symphony orchestra. A rendition of the Grateful Dead could second please with government. You already played with the Allman Brothers, Eddie. He's you know, he's all over the place at a couple of years ago. He put together a band and they came to Chicago. You wrote a few other places. And it was for the 40th anniversary of the last loss.
Larry Mishkin: [00:20:03] How they they did their own versions of a number of truths that were played at their concerts. They brought in some of the talent that appeared at that concert. Dr. John, was there a few others? They had guards. Hudson, though, the keyboard player. The bass was one of my all time favorite, Jane Budowsky on keyboards. Jamie Johnson, I'd be retired weight hurdles, but never seen before. It was tremendous. They come out, they open up with Upboat, Cripple Creek. It just dive right in and play it. A lot of the tunes. But then they started bringing out the ghosts to do some of that back catalog. You saw Cheryl double came out. Dave billowed from the radiators. I had a great, great job of it. Who's your love? There was just absolutely amazing play notes are wild right beside Jalbert. They didn't break that out like nobody's business. They came out the second set, John. But just keep playing the role of Garth. Let's from a couple of years ago opened with a tremendous organ solo that they jumped into just fever. And when I read a good article about that lately, they talked about the band's performance at Woodstock. And they opened with just fever, with dark nights of doing this really long, extended time keyboard solo on a Hammond B3. And they said that that, you know, many people credit that with formally bringing, you know, the Hammond B3 squarely into the minds of the rock and roll scene because of the tremendous solos that the guard played at Woodstock. But but Dusty, who's always been one of my favorites. He was great to a great solo there. And then another tune that Cherry does quite a bit with his solo about history trade.
Larry Mishkin: [00:21:44] Dave followed him now did that. And then they brought out a guy named Bobby Margolin whose claim to fame. He was the guitar player for the Muddy Waters playing Carl Perkins trio. And he brought out Muddy Waters youngest son with Hemp chose us by boat. Your mortgage deal to do a great version of Caledonia at Derb, then got the ending to the traditional. I caught it with everybody on stage doing the way that I shall be released. They played for about four hours. Just a rock band just from that show. I think this particular version of this tour is over, but I kind of tell people if they're ever covered, by your way, again in a year or two to. Do it. You have to go see this.
Larry Mishkin: [00:22:28] Warren is great. The Kalki brings out is tremendous. It's a lot of fight. Whether you like it, whether you've ever lose to the band or not, it's a great show. If you've listened to the band, it's a real treat. What was the venue played at the Chicago Theater? So lovely venue. You know, we had great seats.
Larry Mishkin: [00:22:47] So the middle of the first section of the balcony. We had a great view of the stage. It's everybody coming off an order and everything that was going on. And yeah, really a lot of folk really, really nice. It was interesting because the very next night, you know, I went out to hear music. I was to the other extreme. Right. Elvis Costello, who I really love. But Elvis is known as the king of, you know, the three. But it pop songs and just great songs. But one of the things I love about Elvis that a lot of people don't know, Elvis is a huge dad. Yeah. Yet Sherri really got along well and we played each other from time to time. And the story is that Elvis fell in love with the dad at one of the 1972 europe. 72 shows in England. Yeah, my aunt actually I could probably remember which one it was. But the story he tells us, you went out there, he sat in the rain all day. Was so mesmerized by the dad that he forgot that it was raining. And, you know, it's great. I really love Elvis and I love that he's got this this actually, you know, to the dad kind of channels their energy a little bit.
Jim Marty: [00:23:55] There's actually a photograph somewhere where Elvis Costello was pointing to him in front of the stage. At that show was an outdoor show, which was like the rain murdered outside of England, the U.K. That's a dead. Part of it was either the 72 or 74 Europe show. But Elvis tells you. Go ahead. My wife, my girlfriend at the time saw Elvis on his first U.S. tour in 1978 or 79. And while for some reason he pitched a fit three songs in Saturday, taken over the equipment and then marched offstage and never came back. So he's now, rather than a temperamental disposition to is dead in age.
Larry Mishkin: [00:24:39] I saw him at the Hollywood Bowl and he basically played about 30 minutes without saying a word, got up and walked off. At 10 minutes later, they turned on the lights. When he could figure out what happened, that he was done.
Larry Mishkin: [00:24:51] So, you know, he'd be headed west without or boy.
Jim Marty: [00:24:55] Well, I think we'll come into the end of our time slot. So we'll look forward to taking this conversation up again next week. So for everybody out there listening, goodbye to him, Jim and Larry and the Deadhead Cannabis show. Talk to you all very soon. Thanks, Jim. Hi, everybody.
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