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Bill will exempt compassionate care programs from some taxes on cannabis

by Cynthia Laird

State Senator Scott Wiener. Photo: Rick Gerharter
State Senator Scott Wiener. Photo: Rick Gerharter  

Gay state Senator Scott Wiener (D-San Francisco) on Thursday (May 24) announced a bill that would exempt compassionate care programs from having to pay some taxes enacted under Proposition 64, the state's adult recreational marijuana law.

Senate Bill 829 would exempt compassionate care programs from paying the excise and cultivation taxes on the marijuana they give away to compassionate use patients, allowing them to resume providing this service without the prohibitive cost.

The issue was raised by some compassionate use programs late last year, shortly before Prop 64 went into effect in January.

After Proposition 215 was approved by voters in 1996, medical cannabis became legal in California. Nonprofit compassionate care programs emerged to meet the needs of financially disadvantaged individuals with medical cannabis prescriptions. These patients had been prescribed medical marijuana for illnesses such as cancer, HIV/AIDS, glaucoma, and other life-threatening conditions.

With the enactment of Prop 64 earlier this year, new taxes were put in place for all recreational and medical cannabis. One of these is the cultivation tax, which taxes all harvested marijuana that enters the commercial market. A draft fact sheet about Wiener's bill pointed out that compassionate care programs do not operate in the commercial market, since no cannabis is being bought or sold.

Wiener's bill exempts qualifying compassionate care programs from the cultivation and excise tax enacted by Prop 64. After such a program is certified by the state Bureau of Cannabis Control, it will receive a new, non-commercial license that will allow cultivators to donate their cannabis without paying the cultivation tax.

In an interview Tuesday, Wiener said the bill will help low-income HIV-positive people, and those with other illnesses, access their medicine.

"We want to make sure people who are sick and receive free cannabis as medicine don't lose that access," he said.

A recent state report showed that revenue from cannabis sold for recreational use is well below projected estimates. Wiener said his bill won't have much of an effect on state revenue because the number of collectives and nonprofits is small.

"But even if it did, this is about helping low-income people," he said.

According to Wiener's office, the Drug Policy Alliance is supporting the bill.

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