Aug 30 2009

The tax heard round the world


Since the passage of Oakland’s Measure F, which taxes medical marijuana the same as alcohol, the media has been in a feeding frenzy.  Articles gushing over the revenue potential of marijuana have appeared in Time, The Atlantic, The San Francisco Chronicle, The New York Times, The Los Angeles Times, The Economist, and Forbes.

Notably absent from this blitz is any criticism of the taxation of medicine.  And there is some, by some of the most notable voices in the medical marijuana movement, such as Ed Rosenthal and Dennis Peron.

The only place I can find their opinions about this is on Casper Leitch’s podcast Time for Hemp.  Interestingly, the only link for this podcast appears in Bruce Cain’s article accusing the media, and specifically Anderson Cooper, of censoring discussion of “alternative approaches to re-legalizing marijuana”.  Several hours perusal of the Time4Hemp website and audio files have not produced a listing for this particular show.  Could this be because Bruce Perlowin is a sponsor?

Perlowin is CEO of Medical Marijuana, Inc., formerly Club Vivanet, which had a stunning net profit of $26,040 in 2008.   In June of that year it realized $100,000 from issuing 211,926,840 shares of common stock.  The next month the company “took back” 210,117,998 shares in a 1 for 20 reverse split.  Earlier this year Club Vivanet changed its name to Medical Marijuana Inc., issued a 10 for 1 forward split, and staked its fortune on providing automated tax remittance for medical marijuana dispensaries.

Dennis Peron’s comments begin about 40 minutes into the stream, followed by Ed Rosenthal at about 60 minutes.

Dennis Peron on taxing medical marijuana

It has taken a strange course of events, none of which I anticipated. And it is a strange thing in California because in California and the other states, medicine is not taxed. Now all of a sudden our medicine has to be taxed. And I don’t “get” this tax. It seems like we are trying to buy our way into this thing: to buy our way into acceptance. And I don’t think that is the way to go…

And I know it sounds good to say, “let’s just tax our way out of this thing.” But you can’t. This is a moral crusade. And it’s a moral crusade on their side and a moral crusade on our side. We believe in plants and I don’t think we should have to tax ourselves to get it to be free. And I just think it is wrong to do it and I support the idea of getting Marijuana to be accepted and it is being accepted because people voted for it. They think it is a medicine. So the idea is that we have to start feeding the bear money to get him to stay away from us.

We have won and eventually the courts are going to come down on their side and say hey Mr. Peron says all use is medical. Therefore Proposition 215 Legalized Marijuana and maybe through the back door. So we go through the back door and they go through the back door. But now we have these taxes.

Ed Rosenthal on taxing medical marijuana

The 1.8 percent tax on the revenue from all businesses associated with the sale of Marijuana. Now it’s not that I’m opposed to the tax, per se. And I know Oakland needs the money. But in California there is no sales tax on prescription medicine. And Marijuana coming from the dispensaries all needs a recommendation from a doctor. So they’re not treating Marijuana as they are treating other medicines. Instead this initiative is treating Marijuana much like alcohol because bars and other establishments in Oakland that serve alcohol, also have to pay a 1.8 percent tax. And I think that if they want to tax Marijuana it would be fine to tax recreational Marijuana. But I don’t think that patients should have to pay a sales tax. If you hear the club owners, or other public officials, they say, “Oh no, the patients won’t pay it.” But everyone knows that ultimately the patients will pay it. It doesn’t’ come out of the profits of the distributors it comes directly from the patients. And I don’t think that patients should have to pay a tax for their medicine.

Kevin Reed of The Green Cross of San Francisco is another prominent voice in the movement that doesn’t think taxing medical marijuana is such a hot idea.  The Green Cross issued a press release on July 25th that began, “The Green Cross in San Francisco says that this is the first step towards pricing out patients and demeaning the medical movement. ”

Kevin Reed on taxing medical marijuana

Medical Cannabis Dispensaries are taxed at the state and local level, through sales tax, payroll tax, and income tax. Levying higher taxes, like those resulting from the Oakland measure, will result in higher prices for patients. Proponents say these taxes are a way to legitimize and justify general adult use. However, such a sin tax only works to punish patients, the only members of the California adult population who currently are allowed to purchase cannabis legally.

Googling the news for “richard lee” marijuana 2835 reveals that not once during the media circus over Richard Lee and taxing medical marijuana was HR 2835 mentioned, even though Americans for Safe Access announced its introduction in Congress on 12 Jun 09.  The first item in The Medical Marijuana Patient Protection Act moves marijuana from Schedule I of the Controlled Substance Act to Schedule II.  This will “establish” medical marijuana in that it will permit physicians to prescribe it just as they do pharmaceuticals.

For more info:
Marijuana’s new high life – The Los Angeles Times | 30 Aug 09
Colorado’s Marijuana Economy:  An Explosion of Ganjapreneurship – The Atlantic | 26 Aug 09
Time to Legalize Drugs – The Washington Post | 17 Aug 09
ObamaCare’s Medical Marijuana – Forbes | 13 Aug 09
Regulating cannabis in California – The Economist | 6 Aug 09
Marijuana Supporters Welcome a Tax Increase – The New York Times | 22 Jul 09
Oakland voting on pot tax backed by advocates – The San Francisco Chronicle | 19 Jul 09
Marijuana moves mainstream – The San Jose Mercury News | 28 Jun 09
Re-Legalize Marijuana Now, Obama – NewAgeCitizen | Aug 09
Oakland’s marijuana legalization initiative is still a Trojan Horse – | 16 Aug 09
Green Cross issues press release condemning Oakland marijuana tax – | 26 Jul 09
Oakland cannabis tax measure bad for movement – The Green Cross of San Francisco | 25 Jul 09
Selling out the medical marijuana movement? – | 24 Jul 09
Tax Prozac, not medical marijuana – | 20 Jul 09

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