CA marijuana legalization snafu means tax holiday for MMJ firms

An omission in the language of California’s recently approved adult-use marijuana ballot initiative has resulted in a sales tax holiday for medical cannabis businesses through the end of 2017.

The snafu means medical marijuana users don’t have to pay the existing 7.5% sales tax, which could give MMJ businesses more pricing flexibility and a bump in sales.

The initial thinking behind Proposition 64 was to give medical marijuana users a tax break versus recreational consumers once the initiative kicked in come 2018, according to the Washington Post.

But the Jan. 1, 2018 start date was left out of a particular section of the ballot measure, so the elimination of the existing 7.5% sales tax on medical cannabis began when California voters approved the initiative last week.

The new law adds a 15% excise tax on all marijuana – both recreational and medical – that is set to take effect at the start of 2018. The 7.5% sales tax will be added on top of that for recreational sales.

The architects of the initiative say they didn’t extend the MMJ sales tax holiday intentionally, according to the San Francisco Chronicle, but analysts predict the blunder could cost California’s government tens of millions of dollars in lost revenue.


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2 comments on “CA marijuana legalization snafu means tax holiday for MMJ firms
  1. Dave Armstrong on

    It was NOT an omission but rather an admission to guilt! Prop. 215 aka the “Compassionate Use Act” was never written nor intended to create that a SALE ever occurred or that SALES taxes were to be collected! California created the “grey area” themselves in order to mislead and misguide individuals and organizations into forming unlawful entities (anything but a collective or cooperative) simply so the business transactions involving US currency and cannabis were considered illegal. You see by purporting and supporting this California knew it could legally TAX these unlawful entities and their illegal business activities. So the so-called omission was the reality finally coming out and an admission which like finding the truth needle in the hay stack. Our medical marijuana laws were NOT intended to fly in the face of federal laws like the CSA nor were they intended to fill the greedy coffers of state and local government or for-profit corporations! The defrauding of millions of medical marijuana patients and billions of dollars has been going on here in California since our lawmakers and crafty lawyers codified Prop. 215 when they purposefully did NOT state that “selling” and “profiting” from pot was either legal or illegal. This is why there are NO law abiding “collectives” or “cooperative” operating in California today other than MediMarts. The SBOE knows that the those are the ONLY two entities allowed under Prop. 215 to operate a marijuana business and the fact that those are “TAX EXEMPT” operations because until November 8th even state law did NOT allow SALES or PROFITEERING from pot! Why everyone can’t see this travest of Justice and misuse of power by our own governmental entities baffles me still today. My finding the TRUTH or the needle in the hay stack over four years ago lead to both the MCRSA and AUMA my friends. California knew it had to coverup it’s wrong doing and actually finally make SALES and PROFIT from pot legal at a state level since it never was before! Wake up California and America and pay attention to what and why things are happening at such an expedited rate. Why would any industry or anyone for that matter let this over exorbitant TAXATION of a medicine or consumer product occur or put up with it when it’s a plant put on our planet for the common man’s use? I highly advise everyone and anyone to go to my blog “” and find out just how bad we’ve been fleeced and defrauded by our own leaders and lawmaker! Money is the root of all evil and our state and local governments have gone mad over the yearning for marijuana money at our expense! I’m praying that Uncle Trump and Mr. Sessions put the big bear back in hibernation where it belongs until federal laws coincide and coexist with state laws so we can ALL live happily ever after with “top down” conforming laws rather than blatant confliction!

  2. Adam Koh on

    All these stories about the CA state govt losing millions in taxes due to this provision in Prop 64 are extremely overblown and even approaching the realm of “fake news.”

    MMJ patients in CA would need a state-issued ID card to claim the tax break.

    Despite estimates of as many as 1.25 million Californians with doctor’s recommendations, none of the articles on the topic have cited how many actually have state ID cards.

    So, of the over 1 million Californians with doctor’s recommendations, how many ID cards were issued by the state in the last full fiscal year (FY 2015-2016)? The answer is less than 7,000. 6,667 to be exact. That is the number of people receiving this tax break. Just a bit over 2,000 cards have been issued so far in the current fiscal year.

    Additionally, the state Board of Equalization estimates that 2/3 of dispensaries don’t pay their sales taxes, meaning that the supposed lost revenue is largely not even being collected in the first place.

    It’s a shame that these errors and false characterizations get perpetuated by the current media echo-chamber. Do some research, people. Accuracy in reporting is essential to a functioning democracy, as well as to moving the industry forward with responsible, informed policy.

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