Tax relief for 'compassionate care' pending in Sacramento

Posted on September 12th, 2018 by Global Ganja Report and tagged , , , , , , , .

CaliforniaAmong several cannabis-related bills that cleared California's state house before the last legislative session came to close is one that would lift the tax burden on medical marijuana providers. The bill is intended to again open space for "compassionate care," which was ironically squeezed out under California's adult-use regulation regime. 

As California's legislative session neared its end on Aug. 31, a flurry of bills to reform the state's legal cannabis program came to the floor. Among those that passed, and now await Gov. Jerry Brown's signature, is one that could make a big difference to medical marijuana patients and providers.

The bill, SB-829, introduced by Sen. Scott Wiener of San Francisco, an openly gay progressive Democrat, would exempt "compassionate care" programs from paying the state cannabis taxes imposed by Prop 64 when providing free medical marijuana to financially disadvantaged people suffering from serious health conditions. 

The text of Proposition 64, California's 2016 legalization initiative, called for a "feasibility study" for non-profit cannabis providers, but this has been put off until 2020. This has left compassionate care programs in the legal lurch—subject to the same taxes as for-profit cannabis businesses, an often incapacitating financial burden. 

As Bay Area Reporter notes, this is fueling a black market—the very thing Prop 64 was intended to do away with. The San Francisco-based gay community weekly notes the emergence of a "sesh" (session) scene, with underground dealers meeting up at private parties to sell discounted cannabis. Fortunately, the BAR quotes Debby Goldsberry, chief executive officer of Magnolia Oakland dispensary, expressing confidence that Brown will sign SB-829.

Other bills pending
Another measure related to taxation of cannabis that passed the Legislature is AB 1863. As Cannabis Business Times explains in its round-up of the session's bills, AB 1863 would allow tax deductions for commercial cannabis activity. It would change a provision of California law mandating that the state tax code "conform" to federal tax law. Specifically, it would remove the stipulation that the state code must mirror the Internal Revenue Service's notorious Code 280E, which bars deductions for any commerce involving Schedule 1 or Schedule 2 controlled substances. Cannabis and cannabinoids, of course, have Schedule 1 classification under the federal Controlled Substances Act—that for drugs with no medical value.  

Also passed and awaiting Brown's signature is  SB 1127, which would allow parents to administer medical marijuana products to their ailing children on school grounds. This bill has been dubbed Jojo’s Act, after a wheelchair-bound South San Francisco high school student who suffers from a severe form of epilepsy, and depends on regular doses of cannabis oil to prevent debilitating seizures.

Then there's AB 1793, which would expunge all cannabis-related convictions from 1975 to 2016, potentially impacting nearly 220,000 cases.

Those that didn't make it
Another bill related to the social justice questions around cannabis, and addressing the racist legacy of prohibition, was SB 1294. This would have put in place a statewide "equity" program modeled on those already instated by several California municipalities—most notably Oakland. This would have meant directing funds and technical assistance for the cannabis industry to those communities that were disproportionately impacted by prohibition-era cannabis convictions.. This measure was overwhelmingly defeated in the state Senate.

Failing to even make it out of committee was SB 930, which would have enacted a "Cannabis Limited Charter Banking and Credit Union Law," setting up a state banking system for the cannabis industry.

Also dying in committee was AB 2641, which would have permitted small cultivators to apply for "on-site sales and consumption" licenses for temporary events, such as fairs or farmers' markets. The California Growers Association had been watching this bill closely, as it would have opened up alternative points of sale for rural areas where dispensaries are few and far between. As Cannabis Business Times recalls, direct cannabis sales at such events are not allowed under the Prop 64 regulatory regime unless the cultivator also has a retail license.

Cross-post to Cannabis Now

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Compassion re-legalized in California

Global Ganja Report's picture Gov. Gavin Newsom signed into law the Dennis Peron and Brownie Mary Act on Oct. 13. Sponsored by state Sen. Scott Wiener (D-San Francisco), the bill allows cannabis providers to gift certain products away to certain people without paying California cultivation and excise taxes, which can exceed 25%. (Cannabis Now)
Comment by Global Ganja Report on Oct 27th, 2019 at 11:31 pm

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