Senator Wiener’s Bill to Save Compassion Programs that Provide Free Cannabis to People with Serious Illnesses Passes Assembly

Oversight in Prop 64 imposes taxes that are ending programs that provide free medical cannabis to financially disadvantaged people living with HIV/AIDS, cancer, glaucoma, and other life-threatening conditions
September 11, 2019

Sacramento –  Today, Senator Scott Wiener’s (D-San Francisco) legislation  to exempt compassionate care programs from state cannabis taxes when they are providing free medical cannabis to people living with serious health conditions passed the Assembly with a 71-0 vote. It now heads back to the Senate for a concurrence vote in the next week. This bill is modeled off of Senator Wiener’s SB 829, which was vetoed by Governor Brown last year. Due to an oversight in how Prop 64 was drafted, these not-for-profit donation programs that have served medical cannabis patients for decades are now being forced to pay taxes on donations, which are forcing these charity programs to shut down, since they have no revenue. As a result, low-income people are struggling to access their medicine.

“Low income individuals, including veterans and people living with HIV, are suffering right now because they cannot access their medication due to these ridiculous taxes,” said Senator Wiener. “Compassion programs save lives by providing free medicine to people in need. We should not burden these programs with taxes meant for businesses, and we should not force people with serious health problems onto the unregulated cannabis market. Today we are one step closer to ensuring more individuals have access to vital medication.”

Following the passage of Prop 215 in 1996, which legalized medical use of cannabis in California, not-for-profit compassionate care programs started providing free cannabis to financially disadvantaged individuals with medical cannabis prescriptions for illnesses such as HIV/AIDS, cancer, glaucoma, and other life-threatening conditions. These programs partner with retailers and encourage them to donate cannabis to patients who are already struggling under significant medical expenses.

“Providing free medical cannabis to low-income Californians was pioneered by Bay Area dispensaries,” said Senator Skinner (D-Berkeley). “SB34 ensures that this critical service continues.”

With the enactment of Prop 64, which legalized adult use of cannabis in California, taxes were put in place for both adult use and medical use of cannabis. These taxes were designed to apply to all cannabis that enters the commercial market. Donated cannabis is neither bought nor sold and therefore should not be subject to commercial taxes. However, due to an ambiguity in drafting of Prop 64, there is no way for cannabis designated for compassionate donations to avoid the cultivation and use tax. That means that retailers and compassionate care programs are forced to pay high taxes on a product that is donated, effectively crippling the compassionate care programs and leading to patients to seek their medicine on the illicit market.

This five year pilot bill exempts all donations of cannabis and cannabis products to patients holding a valid physician’s recommendation or a medical identification card from the use and cultivation taxes enacted by Proposition 64. It will also allow compassionate care programs to partner with a licensed retailer to facilitate donations, thereby allowing them to get vulnerable patients access to safe and regulated products. SB 34 will require annual reports be sent to the Legislature and the Governor so that all donations and tax exemptions are monitored.

SB 34 is co-authored by Senators Nancy Skinner (D-Berkeley) and Jeff Stone (R-La Quinta), and Assemblymembers Rob Bonta (D-Alameda), Ken Cooley (R-Rancho Cordova), Devon Mathis (R-Visalia), and Jim Wood (D-Santa Rosa).  It is sponsored by the California Cannabis Industry Association and supported by Drug Policy Alliance, APLA Health, Equality California, San Francisco Office of Cannabis, Southern California Veterans Coalition, and many more.

The full text of the bill can be found here.