Centers in California that offer free or low-cost marijuana to patients with pain conditions are being forced out of business by high taxes.
New regulations implemented on January 1 that legalized the recreational use of marijuana included a taxation policy that requires all businesses, including charities, to pay taxes on the market value of the cannabis they sell.
The law has been particularly harmful to ‘compassionate care’ programs, privately-funded organizations that provide free and low-cost cannabis to low-income patients with conditions such as cancer and nerve pain.
The high taxes threaten to close the doors of these operations, making it difficult and expensive for the medical marijuana patients that started the legalization movement in the first place to get the medical marijuana they need.
California’s new regulations that legalized recreational marijuana have imposed unsustainable taxes on centers that have provided cannabis to patients for more than 30 years
Compassionate care programs have been around for decades, beginning when medical marijuana was first legalized in 1996.
Under the new regulations in the Medicinal And Adult-Use Cannabis Regulatory Safety Act (MAUCRSA) that legalized marijuana for recreational use, these programs are forced to pay roughly $50,000 in taxes per 100lbs of cannabis they sell for little to no cost.
The average price for a gram of marijuana in California is $14.50. Most compassionate care programs provide the same amount for a fraction of that price, if not for free.
Sweetleaf Collective is a donation-based organization that had been treating people in the Bay Area with AIDS and cancer for more than three decades before it had to halt business in January.
Last year, the organization gave away an estimated 120lbs of cannabis.
If it does the same this year, Sweetleaf’s founder Josef Airone estimates the company will have to pay $200,000 in taxes.
About $60,000 of that total is from products the organization didn’t make any money on, thanks to the new legislation.
‘People are going to die because of this,’ Sweetleaf founder Josef Airone told Forbes. ‘It keeps me up at night and it’s the first thing I think about when I wake up in the morning.
‘This compassion program is saving so many sick people’s lives. Sometimes when we make deliveries, the patient cries and says: “I would be dead already if it wasn’t for you.”
‘These patients need Sweetleaf. I truly didn’t see this happening with legalization,’ he said.
The California Compassion Coalition was formed recently with the mission of amending the regulations for the benefit of medical marijuana users.
Members of the coalition have said compassionate care programs across the state have closed, stopped providing cannabis or gone underground since the new regulations were implemented.
Many of these centers were already struggling to afford the costs of state and local permits to source cannabis from legal growers.
One of California’s oldest programs, Wo/Men’s Alliance for Medical Marijuana, has said financial burden may force the center to close after three decades of serving patients.
Weed for Warriors, which provides cannabis to military veterans across the state, is also feeling the impact.
‘Cannabis gave my vets hope back,’ Sean Kiernan of Weed for Warriors told the Sacremento Bee.
‘The state of California has taken that hope away.’
Cannabis gave my vets hope back. The state of California has taken that hope away.
Sean Kiernan of Weed For Warriors
In addition to reducing the availability of low-cost marijuana, MAUCRSA increased taxes on each link in the cannabis market chain, raising prices across the board.
Initial reports suggested that under the new taxes, legal cannabis buyers pay about eight dollars in state and local taxes on a typical $50 eighth-ounce of top-shelf product.
The combined state and local tax rates vary from county to county but typically fall between seven and 10 percent.
The California Compassion Coalition met with a subcommittee for an advisory board for the state’s three cannabis regulatory agencies last week.
In the meeting, Shirley Stewart, who treats her cancer with cannabis, told subcommittee members that people like her need help desperately.
‘People with serious medical needs are being pushed aside,’ she said. ‘We need your help and we need it now.’
The coalition asked that taxes be charged on the actual cost of goods rather than the market value, or waived altogether.
The subcommittee members responded by saying that taxation changes are handled by the legislature, not the agencies.
WHERE MARIJUANA IS LEGAL IN THE US
Medical marijuana states:
- Arizona
- Arkansas
- Connecticut
- Delaware
- Florida
- Hawaii
- Illinois
- Maryland
- Michigan
- Minnesota
- Montana
- New Hampshire
- New Mexico
- New Jersey
- New York
- North Dakota
- Ohio
- Pennsylvania
- Rhode Island
- Washington DC
- West Virginia
Recreational marijuana states:
- Alaska
- California
- Colorado
- Maine
- Massachusetts
- Nevada
- Oregon
- Vermont
- Washington
The coalition has also advocated for the creation of an affordable license for compassionate care programs, because as of right now cannabis donations can only be made by holders of business licenses that cost thousands of dollars.
Current Bureau of Cannabis Control regulations require patients who receive free pot to have a state-issued medical marijuana card, which is difficult to obtain because of long waits at county health departments.
The cards get patients a break on sales taxes but can cost as much as $100.
Many in the compassionate care community have suggested that the policy be changed to allow for cards to be issued with only a doctor recommendation.
Some dispensaries such as A Therapeutic Alternative in Sacramento have in-house compassionate care programs that are facing the same taxation problems.
Figuring out a way to make donating pot economically feasible ‘needs to be a top priority,’ Kimberly Cargile of A Therapeutic Alternative told the Bee. ‘We need to take care of this right now.’
Medical marijuana was first legalized in California in 1996 as part of the Compassionate Use Act.
California became the first state in the US legalize medical in marijuana in 1996 when it passed the Compassionate Use Act.
The act provides people with serious illnesses access to use marijuana for the treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraines and other illnesses.
Medical marijuana is now legal in 29 states and Washington, DC.
In the 2016 election, California became one of nine states to legalize marijuana for recreational use.
This year at least 12 more states are considering legalizing marijuana for recreational use after reports revealed that the governments in Colorado and Washington, the first two states to legalize in 2012, are pulling in hundreds of millions of dollars in tax revenue.
Medical marijuana is now legal in 29 states and Washington, DC, and has been legalized for recreational use in nine states.
credit:420intel.com