Dispensary Suing Federal Government over Tax Battle

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SACRAMENTO-

Canna Care, Inc. has been in business for nearly nine years and during that time, the medical marijuana dispensary has been profitable, but they the federal government came knocking on their door asking for more taxes.

“They’re saying, ‘We want you to give us more tax money and we will allow you to operate,'” Canna Care’s owner Lanette Davies said Thursday. “Tell me that’s not a shake down.”

Canna Care has refused to pay up and now, they’re challenging the feds with a lawsuit.

The dispensary says they believe the federal government is bullying statewide legal dispensaries and they’re not taking it.

“No one has challenged them,” Davies said.

It’s been an ongoing battle for several years, initially the IRS wanted roughly $800,000 that’s soared to well over $2 million in taxes, penalties, and fees.

The problem is, it’s a gray area . The state says dispensaries are legal but the federal government says they’re not.

“I think the issue is that the government is taxing something they deem illegal, that’s what the lawyers in this case should challenge,” Ken Rosenfeld, FOX40’s Legal Analyst, said.

In past IRS claims, dispensaries don’t challenge The Internal Revenue Service, they simply pay up.

Davies says it’s not about the money, it’s about making sure the federal government address an issue they’ve long ignored.

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