A bill to impose a new 15% state excise tax on retail purchases of medical marijuana has been proposed in the California legislature (SB 987 by Sen. McGuire). The tax would be in addition to the current 7.5+% sales tax plus various local business taxes assessed by some localities.
“At this time when providers already face burdensome new costs under the Medical Marijuana Regulation and Safety Act (MMRSA), it is unwise and inappropriate to impose any new state tax on medical marijuana,” says California NORML director Dale Gieringer. Many patient advocates regard any taxes on medicine as unjust in principle.
The tax in SB 987 is modeled on a similar 15% tax that would be imposed on all marijuana purchases under the proposed AUMA (Adult Use of Marijuana Act) legalization initiative. “If AUMA passes, SB 897 is redundant and moot,” says Gieringer, “If not, it will only encourage marijuana suppliers to move to the illegal, untaxed, unregulated adult use market.”
Proceeds of the tax would be divided between the general fund, local oversight agencies, state parks, drug and alcohol treatment programs, and environmental restoration for land damaged by illegal growers. In a statement, Sen. McGuire said that the taxes are needed to compensate “communities that have long been paying the price of the negative effects of cultivation brought on by the ‘bad actors’ who destroy the environment and bring in crime.”
No other state imposes a comparable tax exclusively on medical marijuana, though several, including California, make it subject to the standard sales tax on retail items.
“It is neither just nor appropriate to charge those who are doing their best to supply medicine legally to patients for the costs caused by illicit traffickers,” remarks Gieringer. “We call on the legislature to reject taxation without legalization.”