Tax This Plant!

Medical Marijuana Tax Plan and State Structuring by Mark

“They (the government) should just legalize and tax marijuana!”

Have you ever heard someone say, “They (the government) should just legalize and tax marijuana!” Well, I have. So I started to look at the tax plans in the states that have medical marijuana laws to see what they had. For the most part, there is not one solid plan among them. Some say that “It’s medicine and you can’t tax medicine.”  This is true. However, a pharmacist is not distributing medical marijuana; it is being treated as a controlled, over-the-counter medication. Therefore, it can be taxed on the medication aspect just like aspirin, not to mention the plant’s origin is considered an herb, and herbs can be a taxed product also.

Hello. Allow me to introduce myself. My name is Mark. I am a carpenter by trade and I have been following the medical marijuana laws since 1996. When California passed Proposition 215, it was ground-breaking legislation. Now in 2011, 16 states and Washington D.C. have legislation on medical marijuana and a handful of states with legislation in the works. All of them have one thing in common: not one has been able to figure out the best way to set up the business end of medical marijuana! Well, I have taken the time to write a detailed plan of how, I think, to properly run this industry and produce the most tax revenue to the benefit of everyone.

This document started as an idea discussed over a game of cribbage. Then 20 people put in their input and suggestions, and most suggestions were implemented in this idea because each one addressed a past, current, or future concern. The use of medical marijuana should be a constitutional right because it directly coincides with the pursuit of happiness.

This idea outlines the safest, most economical way for patients to acquire a quality product that has met minimum standards and guidelines at the most competitive price available. This way, patients will know that the medicine that they are putting into their already illness-struck bodies has met guidelines to guarantee effectiveness and safety. The following plan will outline my thoughts on how any state can make the next groundbreaking legislation. I have taken ideas from all over and put them into what has become a sensible and simple way to regulate the business of medical marijuana, by explaining every aspect, from licensing to inspections, law enforcement, commercial growers, patients, dispensaries, the relief on the judicial system, and, most important, to create a whole new tax base.

This idea is not going to be all that difficult to accomplish if the structure of the outline is followed. I feel that the total expense, including all licensing costs, insurance costs, employment costs, income and sales taxes, business expenses, and growing costs, will all be able to be achieved for approximately $10 per gram or less. Right now, market prices are dictated by the black market, and patients are paying between $14.29 and $17.15 per gram. The immediate drop in the price will ease pressure on the pocketbooks of the ill.

This program may only have 10,000 patients in its first year. However, as time goes on, more people are going to get ill and will be able to benefit from medical marijuana. In 10 years, there may be 200,000 patients in a state that benefit from medical marijuana. This is all the more reason to implement this idea from the beginning and set it up with a good, solid foundation to build from.

In this outline, the dispensaries and commercial growers, who together are considered the caregivers, are expected to go above and beyond just their businesses. They should have to provide pro-bono work, just like lawyers, to help the seriously ill. This could be showing patients how to grow their own; however, if patients are seriously ill, then odds are that they will need the usable product right now and not in four months. This could also be as simple as delivering patients’ medicine directly to them and possibly helping with administering the medicine, or charitably donating product to the county, to help provide to the individuals that are on a fixed income a way to get the medicine they need without having to find money they don’t have. This will instill a sense of integrity in this industry. This pro-bono clause should be part of the licensing requirements. If applicants refuse to participate with this clause, they will not qualify for the licensing.

These dispensaries will allow greater control of product quality, cost control, and ultimately taxation of the product. In every industry, there are quality standards that have to be met. This industry should be no different. Some states designate a caregiver to grow the medical marijuana for the patients. The problem with this idea is that each caregiver can only take care of a few patients. Now, you may ask, what’s wrong with that? The problem with the designated caregiver laws is that, for example, in the state of Michigan, where there are 200,004 people who have been issued medical marijuana cards, the state will need 33,334 growers to take care of that many people. That is a lot of people to create quality medical marijuana. Another problem is that patients are stuck with caregivers; if they don’t know how to grow medical marijuana, patients are not getting what they need. Patients can’t shop around for the best product or price. Not to mention, where is the sales tax?

What if a caregiver is two weeks from harvest and a mold issue wipes out the whole crop? All of the patients who need this medicine, and have been waiting for three and a half months for the medicine, are now left with no alternative but to break the law to get their medicine. At the dispensary, patients can find what they need. That could be medical marijuana, prebaked goods, cooking oils, or plant clones. The sales can be tracked and taxed at the dispensaries. They cannot be tracked with the caregiver legislation. Another major downfall to the caregiver legislation is that the complete lack of competition allows the caregiver to price-gouge the patient. Patients can’t do anything about it because they have to designate the caregiver or do it themselves, although in some cases doing it themselves is next to impossible.

These dispensaries should be able to purchase from outside sources. This will allow the dispensaries the ability to obtain illness-specific strains from different sources. This will also allow the patients the chance to find the medicine that works the best for them. This will raise the quality control of something that is supposed to be of medicinal grade; this means that it should hold a minimum THC or CBD count, and the product should not be full of growth chemicals. These criteria should be included in the law because medical has to hold some standards.

The purchasing by dispensaries from licensed commercial growers will also allow for the income paid to the commercial growers to be tracked and taxed as income, whereas the caregiver legislation has no possible way to track or tax medical marijuana.

In this idea, a revolutionary new split tax payment is used. The trickle-down effect has proven to only work for the top of the pyramid. With the split tax, the money that is intended for a specific destination is sent directly to that destination, without a delay or interruption from the state. This split tax is designed to help immediately with the shortfalls that the trickle-down effect has created. This split tax will also greatly reduce the amount of time it will take to realize if someone is getting delinquent on taxes.

Properly regulating medical marijuana could potentially balance out our health care costs, or at least slow the increase of our premiums, by using less of the outrageously priced prescription medications, and if you have done any research you know that there are preventative benefits that cannabis provides to the human body. Because of this fact alone, the pharmaceutical companies stand to lose a lot of money if this idea is passed. However, there is nothing in this idea that states that the pharmaceutical companies are excluded from applying for the licensing.

This is an industry, and it should be treated as such. We need to tax and regulate this industry, from its inception into the mainstream culture. There also need to be quality standards for medical marijuana. It should have a minimum percentage of the active ingredients THC or CBD. The plant should be flushed of all chemical fertilizers before it is harvested and consumed. The growers should have to have some knowledge of how plants grow. It’s not as easy as just sticking a seed in the ground and you end up with medical marijuana. Like any medical prescriptions, medical marijuana needs care and knowledge in order for the product to turn out properly.

You are always going to have people who break the law. Look at the current pharmaceutical pill abuse. That industry is regulated and there is still crime involved with it. But the industry is still allowed to operate without much opposition because it is the right thing to do for the people who need those types of medications. Just like in the pharmaceutical industry, if medical marijuana laws are being broken, then criminal charges should be brought forth and prosecuted. In July 2010, the local, state, and federal government launched a raid in the forests in northeast Wisconsin. They found 50,000 plants that were being grown by the Mexican drug cartel. If you were to be conservative on the number, you are still looking at 12,000 pounds of cannabis. But the question that no one has asked is, “Why?” The answer to that is because there is a demand for it here. Let’s stop acting like it does not happen here and properly address this situation; then we can stop funneling money to the cartel when we, as a country, need it more!