As California’s legislative session neared its end on Aug. 31, a flurry of bills to reform the state’s legal cannabis program came to the floor. Among those that passed, and now await Gov. Jerry Brown’s signature, is one that could make a big difference to medical marijuana patients and providers.
The bill, SB-829, introduced by Sen. Scott Wiener of San Francisco, would exempt “compassionate care” programs from paying the state cannabis taxes imposed by Proposition 64 when providing free medical marijuana to financially disadvantaged people suffering from serious health conditions.
The text of Prop. 64, California’s 2016 legalization initiative, called for a “feasibility study” for non-profit cannabis providers, but this has been put off until 2020. This has left compassionate care programs in the legal lurch — subject to the same taxes as for-profit cannabis businesses, an often incapacitating financial burden.
As Bay Area Reporter notes, this is fueling a black market — the very thing Prop. 64 was intended to do away with. The San Francisco-based newspaper notes the re-emergence of the “sesh” scene, with underground dealers meeting up at private parties to sell discounted cannabis. Fortunately, the BAR quotes Debby Goldsberry, chief executive officer of Magnolia Oakland dispensary, expressing confidence that Brown will sign SB-829.
Still Pending: Tax Deductions, Medical Cannabis at Schools, Event Locations, Equity and Expungement
Another measure related to taxation of cannabis that passed the Legislature is AB 1863. As Cannabis Business Times explains in its round-up of the session’s bills, AB 1863 would allow tax deductions for commercial cannabis activity. It would change a provision of California law mandating that the state tax code “conform” to federal tax law. Specifically, it would remove the stipulation that the state code must mirror the Internal Revenue Service‘s notorious Code 280E, which bars deductions for any commerce involving Schedule 1 or Schedule 2 controlled substances. Cannabis and cannabinoids, of course, have Schedule 1 classification under the federal Controlled Substances Act — that for drugs with no medical value.
Also passed and awaiting Brown’s signature is SB 1127, which would allow parents to administer medical marijuana products to their ailing children on school grounds. This bill has been dubbed “Jojo’s Act,” after a wheelchair-bound South San Francisco high school student who suffers from a severe form of epilepsy and depends on regular doses of cannabis oil to prevent debilitating seizures.
Another bill related to the social justice questions around cannabis, which addresses the racist legacy of prohibition, is SB 1294. This bill will require the state to assist local jurisdictions with their “equity” programs, which have been instituted by several California municipalities — most notably Oakland. The bill also requires that the state put together a “model equity ordinance” by July 2019 and direct funds and technical assistance for the cannabis industry to those communities that are disproportionately impacted by prohibition-era cannabis convictions.
The bill perhaps most relevant to recreational cannabis consumers sitting on Brown’s desk is AB 2020. For the past nine months of legal cannabis in California, cannabis events have been required to take place on county fairgrounds in counties that grant approval, which has been incredibly limiting. AB 2020 would make it possible to hold a cannabis event at any venue, so long as local governments have granted authority.
Finally, there’s AB 1793, which would expunge all cannabis-related convictions from 1975 to 2016, potentially impacting nearly 220,000 cases.
Those Bills That Didn’t Make the Cut
Failing to even make it out of committee was SB 930, which would have enacted a “Cannabis Limited Charter Banking and Credit Union Law,” setting up a state banking system for the cannabis industry.
Also dying in committee was AB 2641, which would have permitted small cultivators to apply for “on-site sales and consumption” licenses for temporary events, such as fairs or farmers’ markets. The California Growers Association had been watching this bill closely, as it would have opened up alternative points of sale for rural areas where dispensaries are few and far between. As Cannabis Business Times recalls, direct cannabis sales at such events are not allowed under the Prop 64 regulatory regime unless the cultivator also has a retail license.
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