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Latest from Lane Powell PC

Happy new year! While the shutdown has slowed DOJ, it has not stopped it. And we have fraud documentaries from Netflix and Hulu. Just after the new year, the Senate confirmed Brian Moran as the Western District of Washington’s new U.S. Attorney. Also in Seattle, a guilty plea to wire fraud and filing a false tax return. The scheme involved defrauding the Washington Department of Revenue by under-reporting chewing tobacco purchased from tribal smoke shops…
With 10 states and the District of Columbia having legalized recreational cannabis (representing nearly a quarter of the U.S. population, including the most populous state), an emerging issue is how to deal with the odor generated by marijuana production facilities. A December 19, 2018 article in The New York Times noted a growing number of neighbors of cannabis farms are complaining about “skunky” odors caused by certain volatile organic compounds generated during growing and processing.…
We recently discussed the impact of the Harborside opinion on cannabis tax planning, a tax court decision that disturbed, but didn’t really surprise, those of us who regularly work on the application of tax rules in the cannabis industry. The industry faces a secondary assault following the U.S. Tax Court’s opinion in Alternative Health Care Advocates. The opinion in Alternative raises new — more surprising and more disturbing — concerns regarding common cannabis tax planning…
The new Agricultural Improvement Act of 2018 (Pub. L. 115-334) (the “Act”) was signed into law by President Trump on December 20, 2018. Much press has been devoted to the fact that the Act generally legalizes industrial hemp and will provide federal Crop Insurance for that crop. While this is potentially good news for farmers and their bankers, questions remain for bankers about how they can effectively identify a legal hemp crop and distinguish it…
Happy holidays after a long break. While we may have been quiet, DOJ has not. The U.S. Attorney’s Office in Portland has charged three men with bank fraud and money laundering. The three allegedly used SnapChat to recruit students at Grant High School in Portland to deposit counterfeit checks, luring the teens with pictures of fancy cars and piles of cash in a social media group called the “God Squad.” Start ’em young, I guess.…
The U.S. Tax Court’s recent Harborside opinion confirmed what we have warned our clients for quite some time: section 263A is unavailable for any cannabis business that traffics a Schedule I or II controlled substance. This conclusion is consistent with the IRS view espoused in a 2015 IRS Chief Counsel Advice memorandum and the flush language in section 263A, which states taxpayers cannot use section 263A to deduct an otherwise nondeductible item. Many cannabis businesses…
You already know that discovery is usually limited in appeals of the denial of ERISA-governed benefits. This is especially true when there is de novo review.  But watch out if a breach of fiduciary duty claim is asserted. That same rule (prohibiting discovery) does not apply when a party seeks discovery into purported breaches of fiduciary duty under 29 USC 1132(a)(3). Here’s the case of Friemon v. National Carriers’ Conference Committee and Union Pacific Railroad …
The United States has a long history with hemp, legally distinguished from marijuana, but genetically identical as the plant cannabis sativa (L.) — now, hemp is set to reemerge in U.S. agriculture as an important crop following passage of the 2018 Farm Bill expected sometime this week. There had been a lot of speculation, and disappointment, regarding the Bill’s hang up to date — in fact, many had resigned hope of the Bill passing this year…
Earlier this week the U.S. Tax Court issued its long-awaited opinion for the Harborside case, which addresses several issues that impact cannabis tax planning strategies.  Those issues include: Definition of “consists of” as used in section 280E; A Narrow view of CHAMP and when a business engages in two or more trades or businesses; Hints that separate taxpayers may be aggregated as engaging in separate trades or businesses; Holds that section 263A does not apply…
We try not to blog about developments outside the scope of our expertise. However, because many of our clients are very involved in Canada (or want to be), we want to share with you this article (authored by a very reputable Canadian law firm) about Ontario’s recently enacted Cannabis License Act and related regulations. Enacted last month, this legislation provides a mechanism for privately-owned business to become licensed retailers in Ontario, though the government-run Ontario…