Medical cannabis donations in California are now tax-exempt

Medical cannabis donations in California are now tax-exempt

California Governor Gavin Newsom recently signed a bill that will be good news for poor medical cannabis patients in that state. The Dennis Peron and Brownie Mary Act (named after two people who are legends in the medical cannabis field) allows for as much as $53 million to go to “compassionate” medical cannabis donations. Before the current push for legal cannabis, people in San Francisco used to run around and give out medical cannabis, for free, to people who need it, but with the arrival of more recent adult use legalization, the practice wasn’t technically legal — most co-ops were closed under California’s legal cannabis laws, and the most anyone could donate to someone else was one ounce at a time (rather than giving away much more to multiple people).

This new bill, however, makes all of the donations legal, and allows growers to dodge the $9.25 per ounce (!) taxes on donated cannabis. The law also allows retailers to skip taxes on cannabis that they’re giving away. Of course, these donations depend on charity — while the law allows for up to $53 million of cannabis to be given away to patients that need it, the odds are good that businesses won’t give away that much. In reality, experts expect only about 1% of the states’ cannabis supply to be donated — that’s still $31 million, but much less than the law allows for (room for growth, we guess).

There more the law could do as well — this bill only covers flower donations, so cannabis-related products are still being taxed as usual. And there’s also a bit of a change of mindset required — many people entering the cannabis industry aren’t necessarily familiar with the history, so it’s important for those who are familiar with the work of people like Dennis Peron and Mary Jane Rathbun to help make sure that compassion and giving are a priority for cannabis growers and vendors. Yes, this is a business, and yes, there’s a lot of money to be made in cannabis, but don’t forget that the reason the business exists at all is because a lot of kind, brave people risked their freedom to show how important cannabis is for those who need it. Now that this bill has passed and California has the option to give away cannabis in this way, it’s on business owners to recognize where they can bring compassion and charity to their work.

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