Proposition 64 not only seeks to legalize and regulate recreational marijuana use in California, but also makes changes to the state’s longstanding medical marijuana industry.
“We strengthen it in a couple key ways,” Yes on Proposition 64 spokesman Jason Kinney said of the measure’s medical marijuana provisions.
From privacy protections for patients, exemption from state sales taxes, and protections for medical cannabis patients who are parents, Kinney said the measure bolsters the rights of medical marijuana patients while keeping the state’s previous medical marijuana rules intact.
The prospect of a recreational market in California has led to speculation on what the future holds for the medical marijuana industry. Some predict more people will become medical marijuana patients to avoid higher tax rates and be able to possess more marijuana without being penalized. Others state the measure will push cultivators into the black market to avoid the costs of coming into the legal framework.
A co-author of Proposition 215, which in 1996 made California the first state to legalize medical marijuana, has even come out against Proposition 64 stating that it would appeal to big business interests and that it misrepresents what he sees as marijuana’s main purpose — medication.
Wonderland Nursery owner Kevin Jodrey sells and grows medical cannabis clones at his Garberville business. He said the passage of the Medical Marijuana Regulation and Safety Act by the state Legislature and Gov. Jerry Brown last year, which created new regulations for the medical industry, clearly separates the regulation of the medical market from any recreational market that may emerge.
What concerns Jodrey more is Proposition 64’s allowance for a single business to obtain unlimited business license types, which he and many other locals fear will allow larger corporations to outcompete and eventually buyout smaller farmers and businesses in the recreational market.
“Medical will work under its own premise,” he said. “I can stay medical if I want to. I’m grandfathered into a dispensary. If I was to go (recreational), none of us know how it’s going to play out.”
The Yes on Proposition 64 campaign states they further separate medical and recreational by exempting medical marijuana patients from having to pay state sales and use taxes.
“You are currently paying that,” Proposition 64 author and Sacramento attorney Richard Miadich said.
Under Proposition 64, both medical and recreational marijuana businesses will have to pay a 15 percent excise tax and a separate cultivation tax based on the weight of the product. The costs of these taxes are often passed on to customers, Miadich said. Local governments would still be able to implement local sales taxes on medical marijuana businesses.
MC2 Medical Cannabis Consulting & Evaluations Director Chip Perry in Eureka said he works with about 7,000 medical marijuana patients. He said patients pay state sales taxes — currently at 7.5 percent — but would have to pay double this amount if Proposition 64 passes. Similar to several marijuana advocacy organizations, Perry said that taxing patients would only create further hardships for sick people who likely have other medical costs to deal with.
“Sick people are not the same as stoners,” Perry said. “These people are sick. We’re going to double the tax on sick people?”
In an opinion piece published in the Sacramento Bee last week, California Board of Equalization District 1 Member George Runner also questioned Proposition 64’s and the California Legislative Analyst’s Office’s assessment the measure’s marijuana taxes could generate up to $1 billion in annual revenue within the next several years.
Runner wrote Proposition 64 would relax some of the Medical Marijuana Regulation and Safety Act’s “robust” regulations before they could take effect in 2018 and would reduce the amount of revenue for state and local governments by not taxing patients who cultivate and primary caregivers who grow for patients.
“Marijuana users who are desperate to save money could return to the black market or pick up a ‘Prop. 215 card,’ skipping the state sales tax on marijuana — and likely other taxes as well,” Runner wrote.
North Coast legislators Sen. Mike McGuire and Assemblyman Jim Wood both attempted to implement excise and cultivation taxes on the medical marijuana industry this year, but both bills failed to pass through the legislative committee process.
Proposition 64 also limits fees county governments can impose for voluntary medical marijuana cards to a maximum of $100, with fees also allowed to be reduced for low-income MediCal patients by 50 percent and waived for indigent adults. Currently, Humboldt County charges non-MediCal patients $191 for their card and $95.50 for MediCal patients, according to the county’s website.
Privacy and protections
To protect medical marijuana patients, Proposition 64 would set restrictions on the release of patient information including their name, address, social security number, and names of their primary care givers.
State and local medical marijuana patient databases would also be barred from containing this information and would instead only contain a unique user identification number for each patient. When looked up, the number will only show whether the Proposition 215 card for that patient is valid or not.
Patients will also be notified within 24 hours when someone is trying to obtain their information.
“If somebody requests patient information from a county public health department, the department has to notify the patient and has to wait 10 days to disclose that information to allow the patient to evaluate the request,” Miadich said.
Kinney said their measure also takes “corrective actions” on what he called institutional issues when it comes to child custody. He said that Proposition 64 would ensure that parents who are medical marijuana patients cannot lose parental or custodial rights just for using their medicine within the bounds of the law.
“There are several cases of medical marijuana patients who are parents being discriminated against on the sole basis that they have medical marijuana recommendations,” Kinney said.
In both the medical and potential recreational markets, state regulators retain broad discretion as to what products make the market, Kinney said.
“The regulators are going to have the ability to not just label potency requirements, but have the ability to set potency limits,” he said.
While Jodrey is not supportive of Proposition 64, he said he thinks that medical marijuana will still have a presence in California, but with more stringent patient intake procedures and regulations on prescribers.
“The separation of legal and medical had to occur,” Jodrey said. “It never would have broke apart later correctly.”
While Perry said he does support the privacy and parental protections and reduced fees for patients, he said the rest of the Proposition 64’s provisions such as its taxes and continued restrictions on marijuana possession do not outweigh the positives.
“All they did was open the door a little bit, but once you get in the door there are banana peels all over the place,” he said.
Proposition 64, also known as the Adult Use of Marijuana Act, will appear before all California voters in November. Nevada, Maine, Massachusetts and Arizona will also be voting on recreational marijuana legalization measures in November.
Will Houston can be reached at 707-441-0504.