A proposed 15 percent tax on medical marijuana sales would push the government's take on retail pot in Los Angeles to more than one-fourth of the advertised price.
The city's take is already 5 percent, and the state levies normal sales taxes (about 7.5 percent) on weed sales, so your $200 ounce of Skywalker OG could end up costing you more than $250.
Longtime cannabis advocates are opposed to the bill by state Sen. Mike McGuire of Sonoma County, which would impose a state tax of 15 percent on medical pot in order to help fund the coming “regulation of cultivation, processing, manufacturing, distributing and sale of marijuana,” according to a statement from his office.
The cash is needed, McGuire argues, to help build the regulation bureaucracy called for under a trio of bills, collectively known as the Medical Marijuana Regulation and Safety Act (MMRSA), signed by Gov. Jerry Brown late last year. That legislation provides long-awaited state recognition for dispensaries.
But pro-pot organizations say 15 percent, on top of local taxes, is too much for the average medical patient.
The group Americans for Safe Access is circulating an online petition to oppose the bill, SB 897, telling supporters that it “imposes an unnecessary and unfair burden on medical cannabis patients.”
California NORML recently declared that it opposes the bill, too.
Dale Sky Jones, chair of the Coalition for Cannabis Policy Reform, says such a tax rate at the cash registers of dispensaries would push patients back toward the black market.
“I understand that we need to pay for regulation,” she said. “However, slapping a sin tax on patients is not the way to do it. The patients who cannot find quality medicine at a reasonable price will find quality medicine at a reasonable price.”
She's talking, of course, about illicit street sales.
Jones pointed out that a 15 percent tax rate on cannabis would appear to be higher than the $3.30 per gallon state tax on distilled spirits. California's tax on beer and wine is 20 cents per gallon, and is “generally paid by manufacturers, wine growers and importers,” the California Board of Equalization says in a FAQ sheet.
San Jose's Dave Hodges, founder of the defunct All American Cannabis Club and lead proponent of a recreational legalization initiative known as the Marijuana Control, Legalization and Revenue Act for 2016, agrees that 15 percent would be too much of a burden for patients.
“It will force people to go to the black market more,” he said. “You're talking a sin tax on people who are sick.”
Jones says that state permits for dispensaries that will be required in 2018 under the MMRSA should cost enough to cover the outlay needed for legislated agencies such as the forthcoming Bureau of Medical Marijuana Regulation.
“The permitting fees are supposed to cover the cost of the regulation,” she said.
Her organization is not opposed to taxing customers at the pot counter, however. Jones just thinks 15 percent on medicine is too much. She said her group might support a 15 percent tax on recreational marijuana if a legalization initiative is passed by voters in November.
The leading initiative, backed by tech billionaire Sean Parker, proposes just such a tax, McGuire's office notes.
“We need to rethink it,” Jones said of the medical tax. “The burden could go to adults and not patients. Maybe it would be more palatable once adult legalization happens.”