CO Lawmakers Target Tax Loophole for Caregivers

Lawmakers in Colorado are worried that a tax loophole exists for medical marijuana caregivers operating large-scale operations.

The loophole gives these caregivers a sizable advantage over recreational cannabis shops, which are subject to higher taxes and must install complex inventory tracking systems.

Under the state’s current laws for medical marijuana, a 2.9% tax is tacked onto cannabis sales between caregivers and patients. Recreational marijuana sold via retail shops, on the other hand, carries a 25% state tax, in addition to local taxes.

The state’s ranking medical officer, Dr. Larry Wolk, believes some caregivers are doing such high volume of sales that they are sidestepping proper oversight. These caregivers, who have up to 100 patients and hundreds of plants, are essentially recreational business owners, Wolk told the Associated Press.

“I am fairly certain that doesn’t meet the definition of a caregiver,” he said.

The current Colorado law sets a five-patient cap for caregivers; however, caregivers can also fill out paperwork to obtain more patients and additional plants. Currently, there are approximately 5,000 registered caregivers in the state.

The state’s Legislative Audit Committee recently voted 6-1 to draft a bill to limit caregivers. The measure calls for caregivers to have a hard limit of five patients, plus themselves, and a maximum of 30 plants.

Barbara Brohl, the state’s head of the Department of Revenue, agrees with Wolk, and believes high-volume caregivers should also submit to the same rules as recreational business owners. That includes background checks, inventory tracking and a 15% state excise tax.

3 comments on “CO Lawmakers Target Tax Loophole for Caregivers
  1. MMJ on

    I’m a little confused. This is linking the medical with the recreational. Dispensaries for medical do not pay tax so why would a caregiver? Are they saying caregivers are “obviously” illegally selling to non-patients? If caregivers had to pay more taxes then patients would go do dispensaries which seems to ultimately be the goal. This is more about control than money, although I image someone in the dispensary industry is pushing this as caregivers keep prices low. Or so I imagine.

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  2. Doc Deadhead on

    The whole caregiver/patient thing was put in place to help individuals unable to grow the chance to get meds from a local grower. A 5 patient limit and a per patient plant limit is there to prevent the ‘large’ grows where many caregivers sign the lease and start a 200-300 plant grow(or more!).

    No matter what the subject, some folks will try to skirt the law or rules for profits but that is no reason to hinder/cripple small growers doing exactly what the MMJ act states.

    Rule #1……don’t try to over regulate an industry that “Already has an illegal underground distribution in place”.

    If the powers to be want to over regulate this industry just like they over regulate everything else then they will have a rude awakening…..we have lived with it being illegal all this time so to revert back to the underground is not a problem, like flippin’ a switch.

    Regulations need to be simple and wise.

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  3. william on

    hmm people heading back to the black market because of over-regulation…this would be people simply not listening to the regulations. Herein lies wisdom far more reaching than the subject of cannabis

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