Laws are usually very definitive and any unclear statements could be interpreted otherwise to favor one party. With the legalization of marijuana for recreational use in California, there could have been an unforeseen error. Before the 2016 elections, a number of states had already decriminalized the use of cannabis for medical reasons. In that case, there were well-laid out laws and regulations that govern the production, distribution and sale of medical cannabis. There has been a lot of anticipation from marijuana advocates that improved laws would be enacted to make the situation even better for them. For sure, continued reforms on marijuana kept their hope alive. The greatest developments in recent times, particularly during the 2016 election were characterized by the decriminalization of recreational weed in Nevada, Maine, Massachusetts and California. Still, these four states had already existing medical marijuana programs that had exhibited potential revenue from tax collections. In a bid to expand their programs, these states gave the voters a chance to continue on with marijuana reforms.
On the Election Day, California reported to have passed marijuana for recreational use. This was great news to all involved in the marijuana business considering how long the journey has been. The California government too had something to smile about considering the amount of tax revenue coming out of marijuana. It is such a huge business in California. However, recreational marijuana use is guided under strict laws and regulations, and in California, they were well documented in Proposition 64. In this particular case, it was not only about recreational marijuana. The proposition has touched on issues involved in the regulation of medical cannabis. This is where a probable error might have occurred especially on laws of taxation concerning this hotly contested subject of marijuana.
Was it an Oversight in Regulating Medical Marijuana Use?
California was so eager to pass marijuana for recreational use. Apparently during the process, a small oversight could have been made. Interestingly, most of the oversights that have been experienced in the past have been found to harm customers. This time round, it was a probable mistake that could be of benefit to medical marijuana users, at least for some time if not in the long-term. As provided for in Proposition 64, the California state would impose a 15% excise duty on both medical and recreational weed. For recreational marijuana, there would be an extra 7.5% sales levy included on top of that. However, there was somewhat interesting news to the ears of medical marijuana patients coming from California’s high court. According to this court, Proposition 64 removed the already existing medical marijuana sales levy. This would see medical weed patients benefit from cheap marijuana up to and until the new laws take effect in 2018.
The entire idea of exemption from sales tax for medical marijuana patients was to have a balance between medical and recreational marijuana users. According to a spokesman for California’s Proposition 64, Jason Kinney, there was an effort made to make medical cannabis a little more affordable than recreational weed following the implementation of the new excise levy. These latest developments coming from the high court in California continue to send new messages around the state. Such a ruling could imply that California medical marijuana sales will be exempted from tax for the whole of 2017. Looking at the San Francisco Chronicle, this may lead to a loss of about $50 million of tax proceeds. However, interpretations coming from the high court of California concerning these tax issues were not well-received by Jason Kinney. Speaking on behalf of Proposition 64 committee, he reiterated that they did not agree with such explanations of the measure concluding that medical weed patients are in a way exempted from paying sales tax on marijuana. This could continue to impact more on the state’s market for recreational marijuana as many more Californians obtain medical marijuana cards to take advantage of this situation to get cannabis medicine free of tax for about a year or so.
There are a number of uncertainties in the marijuana market. This situation is compelling businesses from such places as Colorado among other recreational states to keep off California until this issue is resolved. There is yet another issue of the enormity of the state and the many different laws that marijuana dispensaries and other weed-based businesses will have to address. Speaking on the same issue, a co-partner of Wana Brands, Nancy Whiteman said that California is such a big state to an extent that if anyone is operating in a given situation where he or she has a patchwork of various laws in various municipalities, it would hamper production due to the disparity in regulations. Well, it is not yet determined but we don’t know what could happen before all the stakeholders agree on the way forward.
There are a number of uncertainties in the marijuana market. This situation is compelling businesses from such places as Colorado among other recreational states to keep out of California, until this issue is resolved.
This could continue to impact the price on the state’s market, for Medical marijuana as many more Californians obtain medical marijuana cards.