California Could Soon See A Huge Tax Increase on Medical Marijuana

California Could Soon See A Huge Tax Increase on Medical Marijuana

More taxes may be soon be imposed on medical marijuana in California under two separate proposals that were approved by lawmakers last week, one in the Senate and one in the Assembly. Both bills will now be considered by members of the opposite chamber.

Senate Bill 987 Imposes an Additional 15% Sales Tax

Last week, lawmakers in the California Senate voted overwhelmingly to approve imposing a 15% sales tax on medical marijuana, passing the measure by a 27-10 vote on June 1. The bill, Senate Bill 987, now heads to the Assembly for consideration.

In order to pass the Senate, lawmakers used creative wording to circumvent the state constitution, which requires all tax bills to pass with a two-thirds majority vote. Prior to the floor vote in the Senate, the bill was amended to replace the word tax with user fee.

Known as the Marijuana User Fee Act, the bill was introduced by State Senator Mike McGuire (D-Healdsburg). If passed by the Assembly and signed into law, the 15% tax (or user fee as it is called in the bill) will be included in the retail sales price of all products sold at dispensaries.

The new tax will be in addition to the ordinary state sales tax and any local tax patients already pay at dispensaries to obtain their medicine. Depending upon a patients location, current sales taxes range from 7.5% and 10% of the total sale price, with some cities and counties also imposing an additional 15% sales tax.

Patient advocacy groups have been critical of the proposed tax, saying it will place yet another unnecessary and unfair financial burden on medical marijuana patients, whos medicine is rarely if ever covered under or reimbursed by their health insurance.

Imposing additional tax will be bad for public safety, says Don Duncan of Americans for Safe Access (ASA), a national patient advocacy group. Inflating the cost of legal medical cannabis will force some patients to buy less expensive cannabis from the unregulated illicit market where there are no safety standards or oversight. That is the opposite of what regulations are supposed to accomplish.

Ever since the bill was introduced back in February, the purpose of the bill was clear it meant to tax sick people who rely on medical marijuana, said Chris Lindsey of the Marijuana Policy Project (MPP) in an email. Measures like this are particularly harmful for patients who often have limited ...

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