California Legislature New Bills

California Legislature New Bills

California Legislature New Bills being produced at a rapid pace. We would have preferred to respond to the Canna Law Blog, but it continues to be unclear if they are actively moderating their blog comments. Since it appears that the standard for getting comments approved by moderation on the Canna Law Blog is ARBITRARY AND CAPRICIOUS we are going to help them out by publishing a shadow when we feel the necessity to get our message out. We truly look forward to a day when that isn’t necessary. We are going to engage our own blog system to see if we can get everyone engaged.

California Legislature New Bills
California Legislature New Bills

They published: We responded with:

The bottom line is that the cannabis regulatory scheme in California is out of control. Let’s get very specific..we reviewed or filed > six dozen 1Q 2018 Cannabis Excise [“CET”] and Sales taxes two weeks ago. Some of the entities were multi-million dollar businesses. CDTFA estimates that less than $40 million was collected which is around twenty-five percent of what was expected.

We aren’t geniuses, but we are willing to bet why the take was so low. The CET quarterly return required eight blanks be filled in. The combination of Cannabis Excise, Cultivation and Sales Taxes require roughly 110 distinct types of information be collected. There are complex requirements for commercial invoices, transportation manifests, receipts and record keeping. The record keeping for CDTFA purposes, federal income tax purposes, and BCC regulatory purposes are different, even with respect to how long the records must be kept.

CDTFA, the IRS, and FTB have different Power of Attorney forms to appoint a representative. BCC, CDFA Cal Cannabis, and CDPH MCSB DON’T HAVE FORMS TO APPOINT A REPRESENTATIVE because they don’t believe that it is possible to do so. The lack of an ability for a California cannabis licensee to appoint a representative to deal with regulatory compliance is very likely a violation of the due process requirements of the 14A to the US Constitution.

This is the response we got from CDPH when we asked the question about how a licensee would get a representative appointed.

Please apprise us with respect to what your current procedures are for representation of individuals or business entities by attorneys and certified public accountants [let’s limit the discussion to those licensed to practice in California].
The answer we received from CDPH – Manufactured Cannabis Safety Branch is as follows:
I can address the procedures and future plans for the Manufactured Cannabis Safety Branch. I’ll let the Bureau and CDFA weigh in with responses from their particular offices.

The California Business and Professions Code, in section 26001(c), defines a cannabis license “applicant” as “an owner applying for a state license pursuant to this division.” If the member of your firm who is completing the application for the business is considered and disclosed as an owner, they may complete the application on behalf of the business. Because of this definition in state law, I do not anticipate any immediate changes to our system to allow a representative (non-owner) to complete the application.

Some may not understand the implications of the response, however, the idea that an applicant or a business is precluded from representation by a CPA or attorney is ABSURD. I can’t get fingerprinted for an owner, but we should be able to represent a business before a regulatory agency.

WE REALIZE THAT THE THREAD IS A LISTING OF PENDING LEGISLATIVE PROPOSALS. However, DO WE AS CPA’s AND ATTORNEYS OWE THE CANNABIS INDUSTRY IN CALIFORNIA AN EXPLANATION OF THE LAWS ON THE BOOKS BEFORE THEY ENACT MORE??

We have a proposal to break the logjam and improve cooperation and communication amongst attorneys, CPA’s and EA’s serving the cannabis industry in California and you can read about it here.

 

 

Author: abizcannabis

Managing Director & CEO of integrated transactional financial advisory, tax, and technology consulting firm - aBIZinaBOX Inc New York, Chicago, and OaklandCPA.CITP.CISM.CGEIT.CGMAExpertise with: Alt. Investments/Private Equity, Real Estate, Professional Services, CA Cannabis, Tech Start-Ups and Distressed Assets/DebtTechnology Certifications including:Advanced & High Complexity Cloud Integrator AICPA PCPS, CAQ,, IMTA, CITP ISACA CGEIT, CISMState CPA Societies in California, Florida, Illinois, New York and TexasExpertise with Regulatory Compliance - US - HIPAA, FINRA, SEC Rule 17(a)(3)/(4), eDiscovery, FINCEN - EU- EBA, ESMA, EIOPA UK - BoE, PRA, FCA