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Tuesday, March 22, 2011

Medical Marijuana: Is it Good for the Taxman or Is it Good for the Doctor?

Posted By on Tue, Mar 22, 2011 at 8:23 AM

Whereas California needs money from pot
  • Whereas California needs money from pot

Operating a medical pot farm is no small feat --  especially when we know there are plenty of police and prosecutors who aren't, ahem, kind to the industry. 

But growing this cash crop could become even more costly and no safer under new legislation introduced by a Southern California state senator earlier

this month.

The proposed legislation, which is the brainchild of State Sen. Ron Calderon (D-Montebello), would require growers, transporters, and sellers of medical marijuana to obtain a permit to do business. 

Calderon unsuccessfully tried to pass a similar measure last year.

According to the proposal, California's cannabis cultivators would be required to pay

$1,300 for a state-growers permit under the Cannabis

Certification and Regulation Act of 2011. Likewise, anyone

distributing or transporting medical marijuana would have to obtain a similar license from the state Board of Equalization.

And then they would have to pay upfront a chunk of their sales taxes, just as tobacco transporters and sellers do.

But patient advocates are apoplectic, saying that the scheme burdens cannabis producers with more costs while ensuring absolutely no legal protection.

Directly modeled after the Cigarette and Tobacco Products

Licensing Act of 2003, Calderon's plan would supposedly ensure product safety and

compliance by tracking every ounce of medical marijuana that's grown and sold in the state. The

little California golden bear stamp that's found on every pack of cigarettes would also be

marked on marijuana -- and cops would make sure of this.

Adam Gray, Calderon's senior

policy aide, points to an unnamed dispensary in Los Angeles that sold marijuana with the banned pesticide DDT on it.

"Where did that [cannabis] come from?" Gray asks rhetorically.

"There's still a large black market out there."

There is no language in the 20-page bill that mandates

-- or even suggests -- that marijuana be tested in a lab before it's sold at retail. Also, there's no

legal protection for the folks who would be growing, transporting and selling

medicine -- and who would have the tax stamps as proof.

"It's insane," said David Goldman, who sits on San

Francisco's Medical Cannabis Task Force. "How do you prepay

sales tax when you don't even know what you're going to sell it for? Where is

our legal protection?"

"This is putting safe access [to medical cannabis] very much at risk," said Goldman, who is also head of the San Francisco chapter of

Americans for Safe Access, a patients' advocacy group. "This is

like having the Sword of Damocles halfway down on our necks."

It just so happens that this would also help out the state's financial crisis -- a deficit currently pegged at $26 billion. The new law would ensure that all taxes be paid

on any medical marijuana transaction.

Activists like Goldman and California NORML worked to defeat

Calderon's similar scheme last year. Yet this time around, Calderon is getting help from within the medical cannabis industry: A group dubbed the

California Cannabis Association has signed onto the plan, according to Gray.

But Calderon's legislation has some competition.

State Sen. Luis "Lou" Correa (D - Santa Ana) has proposed a plan that prescribes fees,

not taxes, to fund a regulatory system. It also puts regulation of the distribution

network under the purview of the Department of Public Health, not the Board of


And this makes Correa's plan the "better" of the two,

according to Matthew Cohen, the executive director of Northstone Organics, a Ukiah-based medical

marijuana farm-to-door delivery service.

Other cannabis advocates agree. Correa's bill does not require transporters to pay for a permit and it does not exclude growers with a felony record from the state's medical marijuana industry, as Calderon's does.

It's better than expected, writes Dale Gieringer, executive director of California NORML, in a recent issue of West Coast Leaf.

It's entirely possible that neither bill will pass, although if we were betting bloggers, we'd short Calderon and long Correa.

But the point is that the two bills represent two major diverging schools of thought when it comes to the state's marijuana industry: Is medical cannabis medicine for the doctor, or goods for the taxman?

Is it a public health issue, or is it a public safety issue?

But for the cannabis users and cultivators, who for decades have had to worry about those dreaded knocks on the door, nurses will always trump the cops.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.


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