7:30am | As you may have realized, prescription medications are not subject to sales tax. So considering that cannabis is, as Kris Hermes of Americans for Safe Access points out, “quasi-prescribed medicine” in California—meaning that patients cannot get it over the counter but must first obtain a doctor’s recommendation—the fact that it is subject to the state’s standard 9.75% sales tax might seem a bit dubious. After all, this is a cost that is inevitably borne by the end user—the patient—and not the dispensary, just as it is you and not 7-Eleven who antes up the $1.95 every time you spend $20 on much-more-dangerous-than-pot cigarettes.1
But that is not enough for some in Long Beach. Using our city’s and state’s financial crisis as an excuse, the city council is considering extracting more tax money from those with medical necessity. (This thinking is not unique to Long Beach. For example, State Sen. Ron Calderon recently put forth—and subsequently withdrew—a bill proposing a 41% tax2 on all medpot sales.)
If the whole intention behind placing onerous restrictions on dispensaries within the city is to ensure that they are legitimate medicinal outlets, why would the city council treat them as anything but legitimate medicinal outlets instead of as cash cows? That’s a rhetorical question, because we all know why: most of city staff does not really look at marijuana as legitimate medicine. Then-Councilmember Tonia Reyes Uranga—one of the four councilmembers (along with Robert Garcia, Rae Gabelich, and Val Lerch) who consistently comported themselves as truly giving a damn about the patients—said as much in open session: “Let’s be very clear about this: the purpose of this ordinance is to put [dispensaries] out of business.”
That isn’t literally true, of course: at least we actually allow them here. It was only recently, while writing an OC Weekly article, that I became aware that of Orange County’s 34 cities, only Laguna Woods technically allows dispensaries—and even it doesn’t currently have any. But it’s my guess that Long Beach’s allowance has more to do with prudence: we don’t want to get sued (as is happening with Anaheim, Costa Mesa, Dana Point, etc.).
Running with that thesis, it seems that as a city we’ve said: Okay, if dispensaries are here to stay, we might as well make as much cash off them as possible. Hence comes our non-refundable application fee of $14,732 just to get into a lottery that will determine which collectives might be allowed to open (“might” because no two collectives can be within 1,000 feet of each other), then somewhere between $10,000 and $30,000 per year (depending on membership size) to operate. That’s not including the 9.75% sales tax. And, of course, not including whatever tax Long Beach might pile on.
As it is, it is my understanding that our city enjoys the distinction of being the single most expensive place in the entire country in which a collective may legally operate. And we’re going after every penny. Our medpot ordinance defines a medical marijuana collective as any group “composed of four (4) or more qualified patients and their designated primary caregivers”—meaning that a group of three (3) patients and one (1) caregiver must pony up almost $15K just to have a chance collectively to treat the patients for (e.g.) side effects from the chemotherapy they’re undergoing for stomach cancer, then about $10K annually (again, not including taxes). That’s exactly the same fee that a collective of 444 members has to pay.
Why would Long Beach subject such a small group of patients to such exorbitant fees? Councilmember Gabelich asked just that question at the May 18 city council meeting: Assistant District Attorney Mike Mais replied that it’s because this how collectives are defined under state law.
But that, my friends, is a complete falsehood. You will not find a single reference to collectives in the Compassionate Use Act; and you will not find “collective” used as a noun (never mind a reference to how many people make up that noun) in the Medical Marijuana Program Act (SB 420). But to save yourself the trouble of reading these all the way through, all you need do is consult the medpot guidelines released in August 2008 by State Attorney General Jerry Brown, wherein he tells us that “California law does not define collectives.” So Mais’s claim comes from either ignorance or duplicity. In either case, it means that part of our city’s medpot policy is based on a falsehood. And perhaps not coincidentally, it’s a part that has to do with making money off of patients.
Councilmember Gerrie Schipske has been pretty far from patients’ greatest ally on the medpot issue, and yet she finds the idea of taxing this medicine equally dubious: “If marijuana distributed at a collective is considered ‘medicine,'” she writes on her blog, “how could we tax it? California does not tax pharmaceuticals—so how then is it okay to tax this medicine?”
But on August 3, the city council will be conducting a hearing on doing just that: taxing cannabis for medicinal purposes—along with, in the event that the Proposition 19 passes in November, taxing it for recreational use.
That we are exploring taxing cannabis for recreational use is heartening, because it is my great hope that Prop. 19 will pass and that Long Beach will regulate marijuana for then-legal recreational use—and make a boatload of cash in the process, cash we can use for education, police, etc.
But the exploration of whether we should tax medicinal marijuana should by all rights end before it begins. The answer, quite simply, is “no.” We should not wish to make one penny off of the sick.
Footnotes
1Instead of itemizing sales tax for patients separately, dispensaries simply factor it in to their cost of doing business—costs which affect patients even more than convenience-store shoppers, since dispensaries are required by law to be non-profits, and as such those dispensaries that are the most legitimate have no profit margin into which they can cut and so have no choice but to pass all costs onto patients.
2Probably not coincidentally, this is almost exactly the same as California’s “cigarette and tobacco products surtax,” which the Board of Equalization’s Website says was 41.11% up through June 30.