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Lawmakers May Waive Medical Marijuana Taxes for Low Income Individuals

Aug 21 2018, by Jessica McElfresh in Legal Blog, Marijuana Business, Medical Marijuana

When California voters passed Proposition 64 in 2016, the moment was heralded by many as a leap forward for the state’s cannabis industry. But, not everyone benefited from the new law. Notably, compassionate care programs that give medical cannabis to indigent patients with severe medical conditions are now unable to operate because of their new tax burdens. Under Proposition 64, these non-profit organizations need to pay the same excise and cultivation taxes as for-profit cannabis businesses.

California lawmakers are now set to address this injustice after industry advocates, patient groups, care providers, and medical marijuana lawyers brought it to the spotlight. Two Democratic state legislators from Northern California, Scott Wiener and Jim Wood, have introduced SB 829 that would exempt compassionate care programs that provide free medical marijuana to the needy from having to pay state cannabis taxes.

If you have been charged with a medical marijuana crime, it is in your best interest to reach out to a San Diego medical marijuana attorney for help with your case. To schedule a free, initial consultation, do not hesitate to contact our legal team at (858) 756-7107 today.

How Will California Reduce Tax Burden on Compassionate Care Organizations?

SB 829 is still in committee and will require two-thirds approval from legislators to pass. But, if its committee record is any indication, SB 829 will likely sail through the legislature and land on the governor’s desk for final approval. The bill has successfully passed through several committees with little amendments and almost universal support.

The bill would create a new license category type applying only to entities that donate medical cannabis and derivative products to qualified medical cannabis patients with a physician’s recommendation. The Bureau of Cannabis Control would be charged with regulating and issuing the new license to qualified applicants.

Also, SB 829 would eliminate the following taxes beginning January 1, 2019:

  • Taxes on retailers for the gross receipts from the sale, storage, use, or other consumption of medicinal cannabis or medical cannabis products that are donated to a compassion care M-licensee.
  • The 15 percent excise tax for cannabis retailers on the cannabis they give or sell to compassionate care providers.
  • The cultivation tax on all cannabis assessed on cultivators for product that flows to non-profit cannabis caregivers.

By reducing this tax burden, Senator Wood believes that SB 829 will enable nonprofit compassionate care groups to “once again receive donations from cultivators and help patients treat their symptoms and maintain the best quality of life possible.”

Contact a San Diego Medical Marijuana Attorney Today

In 2017, the Wo/Men’s Alliance for Medical Marijuana gave away almost a quarter million dollars worth of cannabis to low-income patients with serious illnesses, such as AIDS and cancer. But, this year, the group has not been able to make any donations, as their taxes would have reached $85,000.

To learn more about California’s rules and regulations for medical cannabis providers and patients, call a San Diego medical marijuana lawyer at McElfresh Law today. Our legal team is here to assist you throughout your case. We will protect your rights and help you receive your best outcome. To schedule a free case assessment, call us at (858) 756-7107.