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State Taxes Are Killing Charity Medical Marijuana

Vital programs are being driven out of existence, but hope blooms for a legislative fix.

You think your marijuana has gotten expensive since the Jan. 1, 2018 cannabis taxes kicked in? That’s nothing compared to the tax you’d be paying if you were, say, giving cannabis away for free to cancer and HIV patients.

The landmark Proposition 64 bill that legalized recreational marijuana contains a regrettable oversight: cannabis given away charitably to patients with serious illnesses is still subject to all of the same manufacturing, cultivation, distribution, and excise taxes as the marijuana we buy for partying.

That tax burden is pushing many compassionate-care cannabis programs out of business.

“They tax the farmers, and then the manufacturers, then the distributors, and then tax the retail, and then tax the patients for it,” says Lindsey Friedman, director of Jetty ExtractsShelter Project compassionate-care program. “It’s hard to get other dispensaries or companies involved if they’re going to incur the tax hit.”

The Shelter Project is a one-for-one program, giving cancer patients one free Jetty Extracts product for every product sold in California. But the project, which has served more than 1,000 patients statewide since its inception in 2014, is in limbo over high taxes.

“The program is temporarily shut down,” Friedman tells SF Evergreen. “We are working very diligently with state lobbyists, activists, and our lawyers.”

They have some buds in Sacramento. State Sen. Scott Wiener’s SB 829 would amend Prop. 64 to exempt compassionate-care programs from paying cannabis taxes.

“It’s really important that as we legalize adult use cannabis that we not forget that an enormous number of people rely on cannabis as medicine,” Wiener says. “As we commercialize the product and see the industry grow, we must not forget the roots of this movement, which is people who are fighting for access to medical cannabis.”

There are still some compassionate care programs, but their numbers are dwindling because of the tax strain.

“We just absorb it,” SPARC CEO and founder Erich Pearson tells us. “But we don’t feel we should have to pay money on top of the money we spend administratively and logistically to give away cannabis.”

SPARC’s compassionate-care program has been donating free cannabis to a San Francisco HIV hospice for nearly a decade.

“We’ve served Maitri every two weeks for the last 10 years,” Pearson says. “We cater to their specific needs. A lot of folks are diabetic, or maybe on oxygen, so they can’t smoke.”

That program continues to serve patients once they’ve left Maitri, via SPARC’s own delivery services. But larger, statewide programs like the Shelter Project struggle to find delivery services willing to pay the state taxes.

“So many patients live in rural areas,” Friedman tells us. “A lot of them are bedridden and sick, so they can’t go to dispensaries to pick up their product. They can barely move.”

SB 829 hopes to establish tax-free compassion care licenses, and it’s cruised through every committee vote with support from both sides of the aisle.

“We have not received any opposition,” Wiener tells SF Evergreen. “This bill is government at its best. We identify a problem, we step in, and we fix it.”

But Wiener’s going to need overwhelming bipartisan support to pass this bill. The vote requires a two-thirds majority because it amends Prop. 64. It’s also required some legislative trickery, as Wiener has slipped the legislation into another bill currently before the State Assembly Appropriations Committee.

“I used a procedure where I used a bill that was pending in the Assembly,” he says. “I did a ‘gut and amend’ where you literally delete all of the language in the bill and add in the language from the new bill. It’s one of my Senate bills, but I started it in the Assembly.”

To that end, the bill will have to go back through the State Senate, and ultimately get Gov. Jerry Brown’s signature before becoming law. And the compassionate care providers ask that if you support their cause, then let the governor know.

“A hand-written letter to the governor is equivalent to 200 phone calls,” Friedman notes. 

You can find Gov. Brown’s phone number and address by clicking Contact at gov.ca.gov.

“I don’t want to let this go,” Friedman says of the Shelter Project. “What we’re doing is so powerful and has made such a huge difference in people’s lives. I’ve been putting my heart and soul into this for the last four years and I can’t just let it stop.”