420 FILE--Legislation has been reintroduced from last year, Senate Bill 34, which would exempt compassionate care programs from paying state cannabis taxes when they are providing free medical cannabis to financially disadvantaged people living with serious health conditions. Last session, the measure was vetoed by Governor Brown.
Due to an oversight in how Proposition 64 was drafted, these not-for-profit donation programs that have been serving medical cannabis patients for decades are now being forced to pay taxes meant for businesses, which are forcing these charity programs to shut down.
Following the passage of Prop 215 in 1996, which legalized medical use of cannabis in California, not-for-profit compassionate care programs started providing free cannabis to financially-disadvantaged individuals with medical cannabis recommendations for illnesses such as HIV/AIDS, cancer, glaucoma, and other life-threatening conditions. Cultivators and retailers donate the cannabis to these programs, which then provide the cannabis for free to patients who are already struggling under significant medical expenses.
With the enactment of Prop 64, which legalized the adult use of cannabis in California, taxes were put in place for both adult use and medical use of cannabis. These taxes were designed to be applied to all cannabis that enters the commercial market, which compassionate use cannabis does not enter because it is neither bought nor sold. However, due to an ambiguity in drafting of Prop 64, there is no way for cannabis designated for compassionate use to avoid being assessed the cultivation tax. That means that compassionate care programs are forced to pay high taxes on a product that is neither bought nor sold, effectively crippling the compassionate care programs and leading to mass closures of these donation-based programs.
The bill would exempt qualifying compassionate care programs from state cultivation and excise taxes, by allowing licensed retailers and delivery services to facilitate compassionate care programs for medical patients. All donations must be marked as donations in the track-and-trace system and will remain subject to existing testing and packaging requirements.
California NORML has heard from many veterans, seniors and disabled Californians, who are alarmed and often desperate by the effect that newly enacted laws have had on compassionate medical cannabis programs that benefit indigent patients.