Wednesday, July 25, 2012

Medical Marijuana Spurs Reconsideration of Apartment and Condo Smoking Ban in Santa Monica

Santa Monica is referred to as the People's Republic of Santa Monica, sometime jokingly and sometimes seriously, among Angelinos.

In this case it's because of a ban which would have designated the apartments of new tenants as non-smoking, and would have only designated the units as smoking if the tenant informed their landlord. Enforcement of the ban would have been left to neighbors, with fines starting at $100, then $200, then $300.

An existing law prohibiting smoking on private balconies, porches and decks within a 25-foot radius of doors, windows and vents was in effect before the current proposal. While it wouldn't be the first city in southern California to attempt to ban smoking in residences (Calabasas, a little further north on the 101, has a similar ban), its progressive politics hurdled head on into its, well, progressive politics.

Concern that medical marijuana users would have to report their use to their landlords prompted one member of the the Santa Monica City Council reconsider their vote, the L.A. Times reports.

While the measure initially passed 2-4 on its first reading, the ban ultimately failed with a vote of 4-2. The council instructed the city staff to rework the ban, but did not give a date when it could take up the issue again.

Tuesday, July 24, 2012

BREAKING: L.A. City Council OKs Plan to Close Dispensaries, Drafting Plan to Keep Some Open, Contradicts Itself

In an attempt to clarify medical marijuana laws in Los Angeles, its city council is shuttering all registered dispensaries, but muddied the waters by also approving of a plan instructing the city's staff to allow 170 of the storefronts to remain open, the L.A. Times reports.

Confused? You aren't the only one.

The vote to close the pot shops was unanimous among the 14 city council members. Two or three person collectives which could grow and distribute marijuana amongst themselves are approved under the new measure, but pro-access advocates testified that it took years of training and at least $5,000 to cultivate medical grade cannabis.

The 726 dispensaries that registered with the city will be sent letters instructing them to close their doors. If they don't they'll face legal action. Unless they're one of the 170 that are allowed to remain open.

Councilman Jose Huizar, who called for the total dispensary ban, did not support the vote to leave 170 dispensaries intact. He promised the ban would be enforced — but he also acknowledged the city may not have the resources to shut down every dispensary in the city.

Monday, July 23, 2012

I-502 Gets $1.25 Million Shot in the Arm

Washington's Initiative 502 just got a major boost — a contribution of $1.25 million, the Seattle Times reports.

Prior to the million dollar shot in the arm, supporters of the ballot measure to legalize the purchase and possession of up to an ounce of marijuana raised $1.7 million. I-502 campaign manager Alison Holcomb said $1 million of the new contributions will be used to buy TV ads in August.

The $1.25 million comes from the Drug Policy Alliance and, surprisingly, Progressive Insurance founder Peter Lewis. At least now we know why Flo is so amicable.

Though the measure was initially met with skepticism and support trailed in polls, is now at 55 percent for and 32 percent against, according to a Washington TV station.

Supporters credit voters with becoming educated about the regulations that the measure will put in place, such as prohibitions against sales to anyone under 21, as well as becoming more comfortable with the proposal.

I-502: Tax Revenue at the Expense of Affordable Patient Access

     Supporters of I-502 boast of projected state tax revenues of more than $500 million annually.  During tough economic times, this fiscal boost appears encouraging, but at what cost to medical cannabis patients?
     Patients currently pay sales tax on medical cannabis, despite the fact that “prescribed” medicines, like antibiotics, insulin and oxycodone, are exempt from sales tax.  I-502, unfortunately, goes a step further, and in addition to sales tax, imposes a 25% excise tax (“cannabis tax”) on every transaction involving cannabis.  Thus, tax is imposed on each wholesale purchase and every retail purchase of cannabis. This “pyramiding” of the cannabis tax is unlike sales tax, which is generally imposed only on the final retail transaction.   
     So why is this pyramiding of the tax so significant?  I-502 sets up a licensing structure for the production, processing, and sale of cannabis, resulting in potentially three transactions of cannabis from the grower to the patient: (1) grower à processor; (2) processor à retailer; (3) retailer à patient.  For example, assuming a gram of cannabis is priced at $5/gram by growers; $10/gram by processors; and $15/gram at retail, the total cannabis tax paid is $7.50.[*]  

Price per Gram
Cannabis Tax
Sales Tax
1stSale: Producer/Grower to à Processor


2nd Sale: Processor à Retailer


3rd Sale: Retailer à Consumer

Total Tax


Total State Tax = $9.28.  This total does not include other applicable state and local taxes, including business and occupation tax.

      Although I-502 moves in the right direction with regard to the decriminalization of cannabis, its taxing scheme is harmful to patients.  The 25% cannabis tax is ultimately passed on to patients by way of higher prices for medicine.  Washington voters passed laws permitting the medical use of cannabis out of compassion for the sick and disabled.  This taxing scheme flies in the face of that compassion.  At the very least, I-502 should have include tax relief for medical cannabis patients.   An open and honest discussion on the impact of this onerous taxing scheme on medical cannabis patients must join the discussion on the implications of I-502.

[*] Purchase and resale by an independent processor may be excluded, reducing the total cannabis tax paid to the state.