Danny,
If your selling a product thats intended for resale at the retail level then you really should have a business license, and you need to be filing sales taxes for the city,county, and state every month even if all your sales are tax exempt. The state isn't going to care about the guy that sells an ounce here or there and doesn't make much of a profit, but the guys that are selling large amounts to the dispensaries are going to start being regulated sooner or later. Not to mention the fact that getting a business license and keeping proper accounting records lets you turn all your equipment costs and grow expenses into write off's from your income for tax purposes.
Like I said before, now that the business is legal people are going to have to get used to a whole new way of doing things, including dealing with all the red tape every other type of business has to put up with. Little things like workers compensation insurance, liability insurance, paying social security and medicare taxes, complying with OSHA standards, and a host of other little costs and expenses. For example, do you have a burglar alarm for your commercial grow area? And if so, did you remember to pay the extra annual fee to the police to have them actually respond if it goes off? Are you keeping track of all your revenues and expenses using the proper accounting methods? If not the IRS is going to enjoy auditing you. I've talked to a lot of people who are growing commercially in the last few months, and most of them aren't even thinking about this kind of stuff.
As for the 40 plant limit, I suppose it's possible if all you use is edibles, but it's still enough to raise some eyebrows. Most people are going to assume with that many plants that you have to have excess you're selling someplace. Like yourself I'm able to get a much higher plant count then I have currently, and i agree that anything over 20 is just going to make you a target. I'm still deciding exactly how many I'm going to need to have growing in the long term, and I'm thinking 16-20 is just about right if I want to set up a rotation of plants to run from seedling to harvest so that I'm harvesting 4-5 plants each month.
BTW, if any of you are really looking at doing this commercially and need some help with the accounting let me know. I make my living as a cost accountant, so I'm very good at that side of things. I avoid income tax related work like the plague though, so I can't give definite answers about them. That's what CPA's are for.
I'd love it if there was a business license for this because it would provide a level of security in the fact that I'm not going to get raided by a cowboy cop that just wants to be a pain in my ass because he doesn't like the new laws. It would also provide a set of rules, well defined rules (hopefully) to follow and everyone would know what's OK and what's not OK. But the license does not exist. If you don't beleive me, go down to the local licensing office (COC, State Licensing Office, or which ever office issues business licenses in CO) and try to get yourself a growers license. The classification for it does not exist, plain & simple.
I ran a small business for 7 years in NYC, FL, & NY State. When I moved to Palm Harbor, FL I was suprised to learn that they don't even issue licenses for home based businesses. And in NYC & NYS they didn't have a classification for what I did, and I sold retail merchandise to independent retail stores. However when I showed up to get a business license I told them what I did and they gave me a license for what ever they considered to be a similar business, which in most cases was Distributor, and they were very friendly about the whole thing. Even though that's not really what I did, they had no problem giving me a license for a different but similar business. You go down to the licensing office and tell them you want a license so you can grow MJ at home & sell it to the dispensories, and you tell me what they tell you. No fucking way is what they're gonna tell you, and they wont find a similar business to sell you a license for, and I bet they wont be as friendly or couteous either.
I would love having a license that says I'm allowed to grow x number of plants and sell to dispensories in a determined area, and that I can transport a certain ammount of weight. But there isn't one so when I harvest I'll have to take samples to dispensories, come to an agreed upon price, and have them pick it up. The whole time holding my breath & praying that the cops don't kick down my door and take my grow equip, my plants, and my meds.
When I ran my business I payed taxes quarterly, and I hired a tax attourney to file them for me. I see no reason to change that method of paying my taxes. If a reason ever presents itself I'll adapt. But paying taxes monthly? That's just not possible unless you have a book keeper on the payroll. And then that's no loner a sole proprietorship, is it?
The thing I like best about this business is it's a cash business. When I ran my other business I was ripped off for close to $200k in 7 years simply because the credit card industry isn't regulated. That's right, a business that does billions of dollars in business each & every day isn't regulated, and it's been in existance for how long? 15yrs? 20yrs? 25yrs? So please don't preach to me about regulations because you're preaching to the choir.
And your wrong about the guy that sells an ounce here and an ounce there. When the witch hunt comes, and I have no doubt that it will, those small timers are going to get steam rolled, mark my words.
And I am keeping records & a balance sheet of sorts. The same type of balance sheet that I used running my other business. It's enough for a tax attorney to get the taxes done.
I'm already use to the "the whole new way of doing things", for me it's just the same old system, at least for the time being. As long as I have no employees I have little red tape if any. The tax attorney is a private contractor and I didn't need any one elses help.
Once I figure out how to expand into a small warehouse (if that's ever possible with the laws in place) then I'll have a little red tape like insurance and a private security system (so I don't have to involve the cops who will probably cause complications). And of course I'm keeping track of my revenue & expenses. At this point my expenses have out weighed my revenue, I wonder if they'll have a subsidy for me. lmao
As far as the plant limit, that little piece of paper is between me and my Dr., & it's protected by the bill of rights. The agreement between a patient & care giver is not protected by the bill of rights. That means that the caregiver carries a lot more risk. That doesn't mean the police wont bend some federally mandated regulations to attain the information that's protected by Dr. confidentiallity laws like they did in CA a few years back, which is why I'm sticking with 20 plants. If I see 40 plant growers getting harrassed left & right I'll be able to see it coming & hopefully I'll have the money to relocate if & when that ever happens.
A 20 plant limit allows you 10 in veg & 10 in flower. To keep things simple & to avoid confusion I'll only have 8 in flower at a time, 8 in veg, and 4 mothers providing clones for my next veg. If you want to do 5 a month, be my guest, but you're the one taking foolish chances with all the prejudice cops I've been reading about.
Thanks for the offer, but I'm good at doing my own accounting. As long as I pay my income taxes I'm fine, and I only need a tax attorney once every 3 months to help me with that, and I wont need one till I start turning a profit. Sales taxes are collected by the dispensories. I'm not sure if they have a Tax ID number but it really doesn't matter. As long as I'm selling to a retailer inside my state, I don't have to keep track of tax ID numbers. And since selling across state lines is illegal, that's a problem I'll never have to deal with.
The long & short, I'm running a small home based sole proprietor business and I will run it as such until new laws are put before me. And I'll run it as carefully as I can due to the fact that this whole business is still very controversial. And I'd appreciate it if you'd back off until there's a reason to breath down my neck aobut it.
