A bill to tax medical marijuana like tobacco is scheduled for hearings by the State Senate Revenue & Taxation Comittee next Wednesday, June 23rd.
The bill, SBX6 -16 by Sen. Ronald Calderon of Montebello, would tax all sales of cannabis (except wholesale-level distribution to collectives or cooperatives) at a rate equal to the tobacco products tax rate.
Sen. Calderon's office has been evasive about discussing the bill and has not returned phone calls from medical marijuana proponents.
Patient advocates strongly oppose taxing medical marijuana. "We cannot support taxes on medical marijuana at present inflated black-market prices," stated California NORML in opposition to the bill. "Many patients are poor and living on disability. Until current laws are changed to clearly recognize the legality of cannabis sales, any tax proposals are highly premature and unwarranted. "
The provisions of SBX6 16 lack basic understanding of cannabis, which is dissimilar to tobacco both in its health effects and how it is marketed. Tobacco is taxed by the cigarette, while cannabis is sold by weight, making it difficult to make sense of the bill's mandate that they be taxed "at the same rate."
Because SBX6 -16 is a tax bill, it requires a 2/3 majority for passage. Opponents are hopeful that they can defeat the bill in committee. Medical marijuana supporters are urged to contact the committee in opposition to SBX6-16.
Committee Chair: Sen. Lois Wolk (D-Davis). Members: Sen. Elaine Alquist (D-San Jose); Mimi Walters (R-Laguna Niguel); Roy Ashburn (R-Bakersfield); and Alex Padilla (D-Pacoima).
Cal NORML letter of opposition:
Dear Sen. Wolk:
As co-sponsors of Prop. 215, we wish to state our objections to SBX6 16, the proposed "Cannabis Tax Law" (Sen. Calderon).
Until current laws are modified to clarify the legality of sale of medical cannabis, any such proposal is premature. At present, the legal status of medical marijuana sales and distribution remains hazy and disputed. Whereas some localities have recognized legal sales of medical marijuana through licensed dispensaries, others have not. Some legal authorities, including the city attorney and D.A. of Los Angeles, insist that such sales are flatly illegal, and many distributors continue to experience raids and arrest by local police. Until this uncertainty is resolved and conditions for legal sale firmly established in state law, the state lacks clear authority to demand taxes. In addition, the voters will be considering a "Tax and Regulate" initiative this November that could substantially change state laws on marijuana.
We cannot support taxes on medical marijuana at present inflated black-market prices. Many patients are poor and living on disability. It is hard to justify a special tax on one kind of medicine but not on others. SBX6 16 would create a two-tier system, in which lawful marijuana for medical use would be taxed, but illicit non-medical marijuana would not. The effect of this would be to encourage illegal, non-medical production.
SBX6 16 fails to set forth a coherent taxation scheme for cannabis. The scheme for tobacco taxation set forth in Revenue & Taxation Code Sections 31001ff does not work for marijuana. Tobacco is taxed by the cigarette, whereas marijuana is sold by weight. Logically, any taxation system for marijuana should also be scaled to the weight content of its major active ingredient, THC. Because of its minimal production costs, any taxes on marijuana should be established at a fixed excise rate, not as a percentage of price or revenues, since the latter could easily plummet by an order of magnitude in a true legal market. For in-depth analysis, see my paper on the "Economics of Cannabis Legalization," at www.canorml.org/ background/mjeconomics.html.
We urge the committee to reject SBX6 16 as ill-considered and premature.
Sincerely, Dale Gieringer, Director, California NORML
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