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hear and view at trial. We found his testimony to be coherent
and credible, as well as supported by the record. He testified
that petitioner’s members paid their membership fees as
consideration for both caregiving services and medical marijuana,
and respondent opted not to challenge the substance of that
testimony. While a member may have acquired, in return for his
or her payment of a membership fee, access to all of petitioner’s
goods and services without further charge and without explicit
differentiation as to the portion of the fee that was paid for
goods versus services, we do not believe that such a fact
establishes that petitioner’s operations were simply one trade or
business. As the record reveals, and as we find as a fact,
petitioner’s management set the total amount of the membership
fees as the amount that management consciously and reasonably
judged equaled petitioner’s costs of the caregiving services and
the costs of the medical marijuana.
Given petitioner’s separate trades or businesses, we are
required to apportion its overall expenses accordingly.
Respondent argues that “petitioner failed to justify any
particular allocation and failed to present evidence as to how
* * * [petitioner’s expenses] should be allocated between
marijuana trafficking and other activities.” We disagree.
Respondent concedes that many of petitioner’s activities are
legal and unrelated to petitioner’s provision of medical
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Last modified: November 10, 2007