Marijuana Goes Corporate

 It’s hard to ignore the prevalence of medical marijuana dispensaries in California and elsewhere. They are on the corner and in the news. If you are a tax lawyer, it is even harder to ignore them, for there are big tax problems in this industry. See Voters Say Yes To Marijuana, IRS Says No. But when I said I thought the industry was going corporate—Is Medical Marijuana Going Corporate?—I didn’t realize how true it was.
Now I’m getting merger notices. Yes, marijuana M&A is here. In this case, it’s about the vapor machines that can obviate smoking and instead dispense the meds without even using a match (or a lighter for that matter).

Medbox, Inc. (OTC Markets: MDBX) announced the acquisition of 100% of Vaporfection International Inc., manufacturer of Vaporfection vaporizers. Medbox was featured on the cover of the Los Angeles Times Business Section: Wall Street sees opportunity in marijuana.
Vaporfection makes “herbal delivery systems.” The deal involved the issuance of 260,864 MDBX stock warrants. Medbox sells and services automated, biometrically controlled dispensing and storage systems for medicine and merchandise. And Vaporfection seems quite a catch.
Vaporfection claimed Best Vaporizer in Product of the Year at the Cannabis Cup Amsterdam 2011, and Best Vaporizer at the Kush Expo LA 2012. The company’s patented designs cause marijuana to release its medicinal ingredient into the vapor. The resulting vapor is pure, virtually odorless, and goes into the patient’s respiratory system.
Vaporfection was created by Amir Yomtov in 2006. In 2011, the company was purchased by entrepreneur Herb Postma. Mr. Postma continues to manage Vaporfection and notes that under Medbox, Vaporfection revenues are projected to exceed $4 million in 12 months. All this sound rosy, but not to the feds.
After all, legal dispensaries are still labeled as drug traffickers under federal law, and that creates big tax problems. Section 280E of the tax code denies tax deductions for any business trafficking in controlled substances. The IRS says it must enforce Section 280E. Yet the U.S. Tax Court has opened the door a crack by allowing dispensaries to deduct other expenses distinct from dispensing marijuana. See Californians Helping to Alleviate Medical Problems Inc. v. Commissioner. 
If a dispensary sells marijuana and operates the separate business of care-giving, the care-giving expenses are deductible. Some expenses might relate to both. If only 10% of the premises are used to dispense marijuana, 90% of the rent is deductible. But good record-keeping is essential. See Medical Marijuana Dispensaries Persist Despite Tax Obstacles. 
But even good records won’t make vaporizers or drug paraphernalia deductible. In Olive v. Commissioner, Martin Olive sold medical marijuana at the Vapor Room, where he used vaporizers so patients didn’t have to smoke. However, with only one business, Section 280E precluded Olive’s deductions.

What is CBD?

White Shark

Breeder: Greenhouse Seed Co.

Type: Sativa Dominant Hybrid

Sativa 75/ Indica 25

Origin: Super Skunk x Brazilian & South Indian Strains

Flowering : 56 - 70 days

Great White Shark was the first prize winner of the Hightimes Cannabis Cup in 1997. This strain is a powerful, knee-shaking plant that really hits the spot and is rightfully acclaimed. The high is strong and seductive - the perfect combination for a winning variety!

THC Notes

THC:14.0%, CBD:1.7%, CBN:0.6%

The nugs I received in my 1/4 I picked up from the dispensary were super dank. The trichomes were amazingly shiny on this strain. It left me with a ton of kief fallen off of these danky nugs. Loved this strain, worked well for my back pain.

High Times Cannabis Cup winner

King Kong Kush

King Kong Kush

Strain: King Kong
Breeder: Dr. Underground
Location: indoor, outdoor, greenhouse
Type: indica/sativa
Flowering: ~53 days
Only female seeds.

Resin, and speed production, in that order are the main values of this plant. For its development we have a mother from Ed Rosenthal Super Bud, an extreme sativa production, pollinated by our mother Chronic reversed, resulting in a rapid flowering plant, a lot of resin and large productions.

Goes well branched, with a vigorous vegetative growth and fast becoming an extremely short flowering period for such a quantity of dry final without losing any quality at harvest. The flavors range from lemon, skunk and incense, there are some nuances Fenosa Haze.

The effect is quick and powerful, providing a state of happiness that you completely uninhibited. Undoubtedly the variety is perfect for mass production of crops.

Strain Lineage / Genealogy / Family Tree

• King Kong »»» Ed Rosenthal Super Bud x ChronicReversed
• Ed Rosenthal Super Bud
  • Eds PEHT
    • »»» Afghanistan x Hindu Kush x Mexico x Thailand xAfrica
    • Afghanistan »»» Indica
    • Hindu Kush »»» Indica
    • Mexico »»» Sativa
    • Thailand »»» Sativa
    • Africa »»» Indica/Sativa Hybrid
• Chronic Reversed
  • »»» Northern Light x {Skunk x Northern Light} x AK47
  • Skunk x Northern Light
    • Skunk
      • Skunk #1
        • »»» Afghanistan x Mexico x Colombia
        • Afghanistan »»» Indica
        • Mexico »»» Sativa
        • Colombia »»» Sativa
    • Northern Light
      • Northern Lights #1 IBL
        • Afghanistan »»» Indica
  • Northern Light (specified above)
  • AK47
    • »»» Colombia x Mexico x Thailand x Afghanistan
    • Colombia »»» Sativa
    • Mexico »»» Sativa
    • Thailand »»» Sativa
    • Afghanistan »»» Indica

Purple Kush 
[Coffeeshop SR-71] 

100% Indica 
Origins - Hindu Kush x Purple Afghani 
Flowering - 50-60 days 
Harvest - Early October

This pure indica medicinal strain comes from California. In that state's medical community she is considered an "elite clone", meaning that she is only available as a cutting. Not to worry if you are a medical merijuana patient in California - this strain can be found at various despensaries throughout the state. Purple Kush is especially popular at the SR-71 dispensary in "Oaksterdam", the section of downtown Oakland that tolerates medical marijuana providers. Patients there praise this Purple Kush's deep body stone as a treatment for pain and depression.

This lady forms a short squat bush with very dense intermodes and huge fan leaves, staying in the 2-3 foot height range indoors. With topping or pinching she will be at least as wide as she is tall. Purple Kush's foliage exhibits a classic indica growth pattern: a sturdy bush with dark green hues and hints of purple toward ripeness.

Purple Kush is versatile, performing well for both indoor and outdoor growers. She does very well in a screen of green (SCROG) setup. Purple Kush buds form tight chunky nuggets with hints of purple in the tips of the calyxes, as well as the soft pine bouquet and a sweet, grapey taste on an earthy foundation. her very frosty veneer of glands will please both the connoisseur of indica potency and the hashish fan. The Purple Kush high is strong, deep stone delivers when it comes to treating chronic pains and inflamations, among other conditions.