No more taxes on medical cannabis

CA Senator Mike McGuire UPDATE: This bill was defeated in the Assembly Revenue and Taxation Committee. Thanks to everyone who helped to stop SB 987.


California Senator Mike McGuire (D-Healdsburg) has introduced SB 987, a bill that will assess an additional 10% excise tax on medical cannabis in the state.  The new tax will be in addition to the ordinary state sales tax and any local tax patients already pay for their doctor-recommend medicine. SB 987 imposes an unnecessary and unfair burden on medical cannabis patients.

Legitimate medicine should be taxed differently than a vice, like alcohol, tobacco, or cannabis used for non-medical purposes. Some lawmakers are under the impression that most medical cannabis users are not legitimate, although no evidence supports this claim. We must not let anecdotes or unsubstantiated bias influence policies that affect people lawfully using medical cannabis with a doctor’s recommendation.  

SB 987 is harmful for patients. Medical cannabis is already subject to ordinary sales and use tax of between 7.5 and 10%, depending on the jurisdiction. Additionally, some cities and counties already impose an additional local tax of up to 10% on medical cannabis. Adding an additional 10% to the cost of medical cannabis, which is not covered by insurance, will be an economic hardship for legal patients – especially those who are already economically vulnerable. 

A recent amendment provides for an exemption for patients who pay a fee to obtain an ID card pursuant to the Medical Marijuana Program Act and have an income that is less than 200% of the federal poverty guidelines. This limited gesture will do little to address the economic impact of SB 987 on the large majority of legal medical cannabis patients who do not meet those criteria. 

Imposing additional tax will be bad for public safety. Inflating the cost of legal medical cannabis will force some patients to buy less expensive cannabis from the unregulated illicit market – where there are no safety standards or oversight. That is the opposite of what regulations are supposed to accomplish.

SB 987 proposes that some of the money raised by new taxes will pay for state licensing and cleaning up environmental damage from medical cannabis cultivation. However, there are other ways to pay for these costs.  Applicants for state medical cannabis licenses are already required to pay all of the costs of licensing, and cultivators who violate environmental laws are already penalized to cover the cost of clean up. We don’t need an additional tax on patients for these purposes.

Join ASA in opposing SB 987 today!