§11362

erent. In 1996 California voters adopted Proposition 215--the California Compassionate Use Act of 1996 (CCUA)--to "ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes." See Cal. Health & Safety Code sec. 11362.5(b)(1)(A) (West 2007). The CCUA provides an exemption from California laws penalizing the possession and cultivation ofmarijuana for patients and their primary caregivers when the possession or cultivation is for the patient's personal me

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

best practices for screening members, securing the facility, and ensuring proper screening of 4 The provision ofmedical marijuana to patients in the State ofCalifornia is permitted by the Compassionate Use Act of 1996. See Cal. Health & Safety Code sec. 11362.5 (West 1996). Pursuant to California Senate Bill No. 420 (Medical Marijuana Program Act of2003), individuals or groups are prohibited from cultivating or distributing marijuana for profit. See Cal. Health & Safety Code, sec. 11362.765; Can

erent. In 1996 California voters adopted Proposition 215--the California Compassionate Use Act of 1996 (CCUA)--to "ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes." See Cal. Health & Safety Code sec. 11362.5(b)(1)(A) (West 2007). The CCUA provides an exemption from California laws penalizing the possession and cultivation ofmarijuana for patients and their primary caregivers when the possession or cultivation is for the patient's personal me

erent. In 1996 California voters adopted Proposition 215--the California Compassionate Use Act of 1996 (CCUA)--to "ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes." See Cal. Health & Safety Code sec. 11362.5(b)(1)(A) (West 2007). The CCUA provides an exemption from California laws penalizing the possession and cultivation ofmarijuana for patients and their primary caregivers when the possession or cultivation is for the patient's personal me

fbusiness was in Sacramento, California.2 In 1996 California voters approved the Compassionate Use Act of 1996 (CUA) to ensure that seriously ill Californians had the right to obtain and use marijuana for medical purposes. Cal. Health & Safety Code sec. 11362.5 (West ¹Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended and in effect for the years at issue, and all Rule references are to the Tax Court Rules ofPractice and Procedure. 2This case was tried

hedule C or the deductions claimed for outside services and advertising expenses. VI. California Compassionate Use Act (CCUA) The State ofCalifornia's voters approvedthe California Compassionate Use Act of 1996, codified at Cal. Health & Safety Code sec. 11362.5 (West 2007), as a ballot initiative in 1996. The CCUA is intended to ensure that "seriously ill Californians" (recipients) can obtain and use marijuana ifphysicians recommend marijuana as beneficial to recipients' health. Numerous medica

proprietorship, the Vapor Room Herbal Center (Vapor Room). The Vapor Room's principal business is the retail sale ofmarijuana (medical marijuana) pursuant to the California Compassionate Use Act of 1996 (CCUA), codified at Cal. Health & Safety Code sec. 11362.5 (West 2007).1 The Vapor Room provides minimal activities and services as part ofits principal business ofselling medical marijuana. Respondent determined deficiencies of$367,531 and $1,146,633 in petitioner's Federal income tax for 2004