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.