A recent bill out of the California state house would make marijuana compassionate-care programs exempt from the substantial state taxes on the medical cannabis that they supply to patients in need. SB 829 corrects a hole in Proposition 64, which saddled these not-for-profit organizations with taxes. The Compassionate Use Act of 1996 made medical marijuana legal in California, which spurred the birth of compassionate-care programs for patients with serious health issues and financial restraints. According to NORML, these organizations have been able to donate product and function tax-free up until this year when recreational marijuana became legal.
What did recreational legalization have to do with medical marijuana patients and associated care programs? As our marijuana attorneys can explain, after voters approved Proposition 64, government representatives and officials began ironing out how the recreational program would work. It was determined a set of guidelines was needed that could pull together the medical marijuana industry (which had been active for 20 years) with the new recreational cannabis law. That is when MAUCRSA (Medicinal And Adult-Use Cannabis Regulatory Safety Act) was born. What was intended to streamline rules and make things easier for business owners, customers, and law enforcement officials ended up strapping medical marijuana institutions with a significant number of regulations they previously did not have to follow.Among those regulations was a stipulation that cannabis businesses must pay taxes on all marijuana products, which were already collecting a new level of taxes along each step of the supply chain. This rule applied even to medical marijuana businesses, and made no exception for not-for-profit institutions. Many patients with serious conditions, such as cancer and AIDS have come to rely on the help of compassionate-care organizations. Even patients who did not have financial difficulties before becoming ill often find themselves struggling once the expensive and constant medical bills start rolling in. In the case of patients with cancer and AIDS, each will often experience nausea and loss of appetite with certain treatments. Cannabis is used to effectively ease these symptoms, making it an important piece of the overall treatment program.
Compassionate-care programs receive marijuana through donations from retailers and cultivators. They then give it out for free to patients they have identified as being in need. As of late, though, these groups have been stifled or forced to go on a hiatus because of aggressive tax rates. There is not a way to mark certain cannabis as being meant for donation, so the groups are straddled with cultivation tax. If they were to give out 100 pounds of cannabis to patients, they would be charged an estimated $50,000 in taxes, even though the product is being given away for free.
Our Riverside marijuana attorneys applaud lawmakers for moving to remedy this situation. We know how critical cannabis can be for patients suffering from serious conditions. Organizations willing to help them should not be punished with insurmountable taxes. We continue to support common sense measures like this outside the courtroom while we fight for the rights of medical marijuana patients and businesses in the courtroom. Our team have both civil and criminal attorneys to best serve your needs.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 714-937-2050.
California Lawmakers OK Free Cannabis, Aug. 28, 2018, By Dan Mitchell, Leafly
More Blog Entries:
The Taxman Cometh: California Cannabis Businesses Unlikely to See Relief, May 29, 2018, Cannabis Law Group