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Pot Group: Tax Suspension Would Alleviate Federal Prosecution Fears

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DENVER (CBS4) - Marijuana activists asked a judge on Friday to temporarily prevent the state from collecting specific “marijuana taxes” on pot sales because they incriminate consumers and industry employees under federal law.

Saying the taxes “tee up a serious federal prosecution,” the attorney for the plaintiffs, No Over Taxation, argued that because Colorado specifically labels taxes on purchases as marijuana-related taxes, it’s identifying people and making them susceptible for federal prosecution.

(credit: CBS)

(credit: CBS)

Marijuana is illegal under federal law, but the U.S. Justice Department said it gives leeway to operators following state law.

“This is not a theoretical threat,” attorney Robert J. Corry said. “The feds are going after people in Colorado for operating licensed shops. This is a problem.”

Corry asked the judge at the preliminary injunction hearing to suspend taxation while the court decides. He said it should take less than a year.

 A budtender pours marijuana from a jar at a medical marijuana dispensary. (credit: David McNew/Getty Images)

A budtender pours marijuana from a jar at a medical marijuana dispensary. (credit: David McNew/Getty Images)

Corry said millions are potentially impacted.

“We have a large cannabis industry in Colorado,” he said. “Lots of people purchase it and tens of thousands of people are directly employed by these shops. They could be incriminating themselves under federal law.”

The case is No Over Taxation v. Hickenlooper.

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