NM Senator Proposes Medical Pot Tax

[JohnMonad]

Senator Proposes Medical Pot Tax
By Dan Boyd
Journal Capitol Bureau

SANTA FE - Tobacco, alcohol, candy and soft drinks aren't the only products being eyed by New Mexico legislators as possible tax targets.
Sen. John Sapien, D-Corrales, has introduced a pair of proposals to tax medical marijuana, arguing that cannabis should be treated like any other commercial product.
"We need to get into a point of realism with medical marijuana as a mainstream item," Sapien said Wednesday. "These bills are not about legalization of marijuana in its totality. It's all about the revenue side."
Sapien's pot proposals call for gross receipts taxes to be levied on the sale of medical marijuana and a 25 percent excise tax to be enacted on licensed marijuana distributors.
The state has five licensed nonprofit medical marijuana distributors and has a number of other applications pending, according to the state Department of Health.
The department has also authorized 1,008 patients to buy marijuana under the program. Also, 307 patients are licensed to grow their own medical marijuana plants, said DOH spokeswoman Deborah Busemeyer.
However, New Mexico's medical marijuana program pales in comparison to the pot industries of other states, such as California. In California, the state's sales tax is applied to medical marijuana sales, and Sapien said he modeled his proposal partly after the approach in that and other states.
He said New Mexico's budget crisis requires lawmakers to look at all possible options to increase state revenue levels.
Though an analysis of how much Sapien's medical marijuana taxes would generate hasn't been completed, Sapien said he thinks the figure would be somewhere between $5 million and $20 million annually.
The state's medical marijuana law, passed in 2007 and dubbed the Lynn and Erin Compassionate Use Act, authorizes the Department of Health to oversee production and distribution of medical pot. Patients who are approved by department physicians are allowed to possess up to 6 ounces of marijuana at a time.

[JohnMonad]

The cost to patients for their medical marijuana is already too high. Also we are being charged a sales tax here in Santa Fe.
I have purchased from SFINM and SWOP and both are collecting tax.

A hefty state tax on MMJ will force many patients back to the streets where prices are much lower than we are paying to get medicine from State authorized producers.
If Sapien wants to "legalize" Marijuana for recreational use I can see that as being a way for the State to raise money.

There is no tax on regular medication and MMJ should be treated the same as all medications.

Let's all work to defeat this "tax on sick people"

[patient4200]

and in addition (:-)) no doubt not a nickle of it will go to the DOH funding for the MCP , which is why I prefer the idea of increasing the renewal fee to 5 k after the first year as mentioned in a previous discussion

Pretty pie in the ski numbers too, with NM being one of the poorest states in the county, I'd like to see where the 5-20 million bucks is coming from, unless they tax it at 500%.

Somebody isn't too good at math, with each producer only allowed 95 plants under state law, this politician seems to think we're a collective state, where we have hundreds of people growing hundreds of pounds and where anybody with a headache can get a card. He should pack it up and move it to california

let's do some dispensary math...

95 plants

let's say we are all masters at marijuana botany and zero waste(Ha!)..every drop of material is worth $400 an oz(HA!). we get an amazing 8 oz per plant(Ha!$!)

5 crops a year (HA!) 3-4 if you are a master

(95*8*5)* 400=1.52mil

one million five hundred and twenty thousand in GROSS sales per dispenser * 20 dispensers = this ridiculous number ( five million or so) @ a 25% tax rate on gross sales. That's assuming of course that all 20 dispensers hit home runs on production and the poorest state in the country can buy 30 million in meds at retail ( double ha)

now we all know those numbers are totally unreal

Let's get a better-er number....

(95*2*4)* 400=304K

304k a year in gross sales..* 20 dispensers=6 million in gross sales

knock out allowable expenses and you're looking at 4 million in net sales

Since NM is a non-profit state, taxing MMJ at that rate simply takes the money way from needy charities and will likely discourage marginal producers from staying in business if they can't make expenses.

As it is, charging grt tax is fair and equitable, I don't expect a 25% tax on ANYTHING I purchase.

Just the silliest thing I've every heard. If you ask me, it's a move to DISCOURAGE the program or gain votes. I'm not feeling too great today or I'd research this some more

Write or call this Senator and let him know where you stand

Make a clear and valid argument for the best effect and make sure to check your "spillin"


Here's what my typical politico phone call would sound like..

Hi, my name is "x", I am a registered voter in "y" and my "z" is a registered MCP patient. I would hope you would do research on the actual MCP and Statewide logistics before you would push for this excise tax on something that most people on disability would be paying for.

I might suggest if you are interested in raising state revenues you ( insert your favorite pet peeve of New Mexico here) raise the costs of car registrations and drivers licenses for people convicted of the crime of DWI to a more significant amount (suggest 10-50x the current fees), since law enforcement is spending a tremendous amount of taxpayer money to arrest and prosecute these violators. Taxing Medical Cannabis would be like adding a 25% tax to Nexium or other important quality of life medications.

I can assure you that you won't get my vote next time around if this legislation passes.

Thanks for taking a moment to hear what I had to say. I know voter feedback is important in determining which legislation you will spend your time on.

Capitol Phone: (505) 986-4371 (btw, this number has been busy all day today)
Home Phone: (505) 765-5662
E-mail: john.sapien(at)nmlegis.gov

[JohnMonad]

Medication is NOT TAXABLE in NM
Marijuana is a legal medication in NM.
No tax on Viagra, aspirin, Oxycodone, heart meds etc.

Get it Sen. John Sapien, D-Corrales?

NOT GONNA HAPPEN!

Let's vote him out next time just for thinking of this stupidity!

JM

[coolslayer]

Wonder if he really thought this lame idea through?

[olliegrow]

Is this similar to what their trying to do in cali? I believe they want to tax it and put it on the shelf like alcohol and tobacco?

[coolslayer]

No,here they just want to tax medical cannabis.......no plans to legalize or decriminalize.

[bedrockbob]

I think that it is a great idea actually. I know that it is just another tax, but I look at it this way...

They are setting up a system by which it CAN be legalized and controlled. They are laying the groundwork for it to be a viable industry. A marijuana industry in New Mexico. Any industry has to pay taxes. I know it is a rough deal for MMJ patients but it will all even out a lot faster if we embrace this. Our politicians actually want to legalize or decriminalize to some extent. As politicians they cant let it get too wild (i.e.California) and they dont want to come out in favor of it unless it makes great fiscal sense. Soon it will.

The whole deal is MONEY. If we buy on the black market we support crime and so marijuana remains illegal. If we build a LEGAL system we enjoy a certain amount of freedom. To legalize also means to tax. Taxing will give them incentive to allow more people to get cards. One begats the other.

As opposed as I am to the government getting a cut of anything, I have to accept it as reality.

[JohnMonad]

So then its OK to tax all our meds?
Not only do we have illnesses but to feel better the State needs to to make a profit on our pain?
I think NOT!
If this tax goes into effect it will cost the patient more money and the 25% tax on the Non Profit Producers will put them out of business.
So say goodbye to the MMJ program and then maybe in 3 to 5 years Marijuana will be legalized and they can tax the shit out of it.
Of course this is all at the expense of sick people!

STOP THE TAX ON MEDICATION NOW!

JM

[dennisjill]

If you take the middle road of 5-20 million (call it 12.5 million dollars) divided among the 1003 patients, the patients would be paying $12,400.79 EACH per year. (and yes, the patients pay sales tax, not the 25%, but the non-profits have to charge someone to be able to pay the 25%, and the politicos aren't going to do it.)

There's more tobacco and alcohol usage than MMJ, why aren't they trying to levy that kind of tax?
Can someone say "tea party!"

Dennis from Montana

[Sandia]

Not having any idea what the costs involved for patients are (still awaiting to discuss entering the program with my doctor at our next visit since he brought the subject up), I think there could be pro/cons of the tax. More cons IMO but I am pondering this subject.

Playing Devil's advocate here:

Any business will pass on taxes/excise fees/operating costs/licensing fees/ etc...on to the consumer. This would make the end product for the customer more expensive.

NOW...I do agree with Bedrockbob that by taxing MMJ in a REASONABLE fashion, would probably help legitimize AND make the popularity (if you could call it that) more palatable to people in the legislature. The key, for the folks on the consumer end, would be that the tax would have to be relatively small...say a percent or two.

As the number of MMJ patients grows, the amt of funding going to the state (and we all know it won't be used for this program :wtf:) would increase as well. It would also be a SEPARATE line of revenue to the state that is NOT part of the sales tax already collected.

If you follow the logic here, since there would be a SEPARATE source of revenue for the state, not many politicians would be keen on cutting this because of the revenue obtained.

This 'may' help such a newly approved program gain more support from legislators, and perhaps prevent it's discontinuation in the future. (God forbid!)

SIDE NOTE: The amt of the excise tax proposed is preposterous in my book. I also agree with JohnMoad that MEDICINE should NOT be taxed. I am just thinking out loud on the subject. I am NOT a fan of excessive taxation by any stretch of the imagination, but I want to ensure that this program is NOT removed at some point in the future.

[Sandia]

There's more tobacco and alcohol usage than MMJ, why aren't they trying to levy that kind of tax?
Can someone say "tea party!"

Dennis from Montana

Dennis....pretty much all states in the US levy an "excise tax" on tobacco. If you look at the link below:

http://www.tobaccofreekids.org/research/factsheets/pdf/0097.pdf

It breaks down the amt of taxes on each pack of cigarettes.....I don't smoke cigarettes but lets say that it costs $5.00 per pack. Factor out the $1.01 (rounded to a buck) the cost would be $4.00 per pack. If you look at what NM 'charges' on each pack ($0.91) then my math comes out to be 22.75% on a pack of cigarettes for the state.

Cigarettes, at least to my knowledge, are NOT considered medicine. Sooooo IMO this should NOT apply to the MMJ product.

Taxes are a touchy subject.....probably with everyone....but in the previous post I made, levying a small excise tax MAY, and I stress MAY....make the MMJ program harder to get rid of if some legislators attempt to do that.

Personal opinion....the 25% excise tax is preposterous for a medical product in my opinion only.

[bedrockbob]

It is a raw deal for a patient to have to pay more for MMJ. The suggestion that MMJ be taxed is a way to get the legislators thinking. It is a great thing to consider and a great reason to call the dude up and tell him how you feel as a patient and a voter. Only if it was LEGALIZED would it be a cash cow for the government. I dont see it as fair, and I dont see it as good governace...I just see it as one more nail in the coffin of prohibition.

Any time we can get our legislators to discuss any aspect of marijuana it is good. Fifteen years ago I was sitting in jail for carrying it. Now we are griping about paying an extra tax on it. Heck, the extra tax is being considered on candy, and soft drinks too.

It is just a proposal and the legislator is asking that it be discussed. If anything comes out of it it will certainly not be 25%. Again, call your reps and tell them how you feel. Not all ideas are good ideas but even BAD ideas are great for our cause because they promote discusion.

[olliegrow]

25% would be crazy, people who need it would pay that tax !! they will still grow their own for that price and tax !

[coolslayer]

I think that it is a great idea actually. I know that it is just another tax, but I look at it this way...

They are setting up a system by which it CAN be legalized and controlled. They are laying the groundwork for it to be a viable industry. A marijuana industry in New Mexico. Any industry has to pay taxes. I know it is a rough deal for MMJ patients but it will all even out a lot faster if we embrace this. Our politicians actually want to legalize or decriminalize to some extent. As politicians they cant let it get too wild (i.e.California) and they dont want to come out in favor of it unless it makes great fiscal sense. Soon it will.

The whole deal is MONEY. If we buy on the black market we support crime and so marijuana remains illegal. If we build a LEGAL system we enjoy a certain amount of freedom. To legalize also means to tax. Taxing will give them incentive to allow more people to get cards. One begats the other.

As opposed as I am to the government getting a cut of anything, I have to accept it as reality.


I disagree,because folks on a fixed income will not be able to afford the high prices of medical herb and will have to get their medicine on the street until it is legalized or decriminalized,which could be and probably WILL be a LONG time from now.

[bedrockbob]

I agree that 25% is rediculous, but it was just a starting point for a discussion. They will discuss it! That is exactly why the legislators propose such a thing to try and get people to ante up.

I do not honestly believe that the price of MMJ has any chance of doing anything except plummeting. Growers in Cali are sitting on two and three crops. They just passed a law that anyone with a card can grow up to the federal limit without fear of prosecution. Cali pot is flooding every market including the illegal markets and driving prices through the floor.

Changing times. I do believe they will allow MMJ for a whole host of new conditions soon, effectively legalizing the herb as in Cali. Once this program has reached some sort of maturity they will let it grow as fast as it can and not be chaos. Adding conditions as growth permits.

I dont want MMJ to be taxed and honestly I dont think that they will. The senator suggested it, they will discuss it, and if MMJ patients call up and make some racket with their representatives it could only be a GOOD thing. By discussing it openly and honestly with our doctors, out legisltors, and even the LAW we can definitely make headway in these changing times.

Some states have a marijuana tax stamp. I would do it in a little different way. I would let anyonbe grow as much herb as they thought they could sell....open market. All herb would be sold at a "farmers market" type place and as it was sold it would carry a tax stamp like tobacco. If the pot had the stamp it was legal. American small business flourishes, Americans growin' what they are consumin' and Uncle Sam gets his extra grease because he is the baddest gangster of them all.

[JohnMonad]

The 25% was purposed as a tax on the growers net. Not to patients as I understand it.
That 25% would most likely put Producers out of business and we are back on the streets.

JM

[bedrockbob]

Well then I guess we are all just fucked then. We may as well just start smoking crack.

And all because that darn senator from Corrales "purposed" a tax on Marijuana.

[coolslayer]

The medical cannabis prices are already too high for folks on a fixed income,especially if their medical bills are not completely covered and have to be paid out of pocket.

[patient4200]

it's all well and good to be indignant here, but that' will not stop this from happening. If you are not registered to vote, register now. Write the senator. Talk to your friends and tell them how much this will impact you and others in your position.

A well placed email does get attention, find his contact information in my previous post in this thread

[bedrockbob]

it's all well and good to be indignant here, but that' will not stop this from happening. If you are not registered to vote, register now. Write the senator. Talk to your friends and tell them how much this will impact you and others in your position.

A well placed email does get attention, find his contact information in my previous post in this thread


Yes, register to vote and write your senator, and vote every time you can. If smokers voted, they would have a voice. Sadly, smokers in general fall into that "silent majority". Most politicians are not concerned with the problems of a demographic that offers no vote.

I believe you will find that Sen Sapien is actually pro marijuana, so be supportive of his efforts if you can see a way to do that. Of course the word TAX is a spooky thing, but hey...every product has to pay taxes and they are trying to balance the budget somewhere. Showing what a valuable product marijuana is to the powers that be is not all bad. So tread lightly.

If I were to contact my senator and give him my opinion, I would also give him a solution... like get the money to balance the budget by tightening state government, or stopping the lucrative loans to businesses that contribute to our governor. In that way you would not be attacking his ideass to open the doors for decriminalization, but rather "keeping it fiscal".

This group is talking about taxing the poor no matter if it is MMJ, soda pop, candy, cigarettes, or whatever. MMJ is not the real issue here. The real issue here is that they would rather tax ANYTHING than be made to run a tight ship and stop the bribes and madness.

So if there is an objection to this it should be made on the grounds of not only an MMJ patient, but an informed taxpaying voter.

Just my two cents here.

[patient4200]

Bob, I appreciate your comments here on cannbis.com. I'm doing ok today so I've done a little research on the senator, a first term politico. I can't seem to find anything that indicates he in favor of the MCP. Just a ditty that he said his proposal is up for killing.

If you have anything that shows that the senator is pro MCP, please provide a reference to it. I'd like to see a state senator on our side for a change.

In my letter to the senator I suggested that a collection of GRT would not be inappropriate since it directly benefits the taxpayers of the county where it is collected and 5-7% is not unreasonable, since the dispenary will depend on county services for police and fire protection.

GRT is already being collected from what I've seen.

Being a first term politico, he had to unseat an incumbent I assume so I hope he's not simply trying to attract some attention here. As you said Bob, there are numerous places to save money in New Mexico.

I proposed the very unpopular excise tax on DUI licenses and registrations, something that will make far more money for social programs.

Let's not forget our MCP program is non-profit, the excess funds collected will be going to some approved charity or NM state program. If the state collects this proposed tax, it goes to a general fund, where the people that need the most help likely won't see a nickel.

Now if the senator would propose something that would increase the funding to the mcp directly, he'd have my full support. I suggested raising dispensary license renewals to 5k after the first year, giving new providers time to get on their feet and build a reserve in the case of a crop failure.

Can any dispenser survive a back to back infestation of spider mites or mold?, utilities still have to be paid. If they can't after a year in business, perhaps they need to move to some other type of agriculture.

that's all for now. i gotta take a nap.

[bedrockbob]

Man you hit a good point with the non profit angle. I really hadn't seen it that way. I am certainly not in the know about how they tax non profits though.

All I know is what I have heard about Sapien, and that doesnt mean much. The SWOP folks are in his district and that is what lent credibility to the story that I heard. I didnt see that his proposal was really an attempt to collect taxes as much as get the issues in their faces.

I beleive that the economy/border issues/drug wars trilogy is playing out as a political issue more and more lately (duh! Only 12,000 deaths in the last two years within ten miles of the New Mexico border!). Gary Johnson could be a contender for prez and legalization will be one of his pitches! So it truly is fixing to split wide open. Just a few years ago you would do hard time in Arizona for posession of over an ounce. Now they are looking at some very Californian ideas. Californians are talking about total legalization, and as I understand it (as of a few days ago) any card holder can grow unlimited plants and the State looks the other way. Law enforcement is even pushing for legalization with L.E.A.P., and reform groups are really gaining momentum.

So pardon me if I get excited about it all. I know that the MC program does not stand for legalization, and what may be good to change the drug policy is not nessessarily good for medical cannabis. Still, when they start talking about taxing marijuana I get all goose bumpy thinking about how American business would flourish if we just grew what we consumed and kept a few billion dollars in the US instead of give it to murderers and theives.

Cartman saved the world with his filthy fucking mouth. I truly believe that stoners can save America from depression and socialism by growing sticky bud.

[patient4200]

Legalization is coming, as taxation will certainly provide a much needed cut in expenses to law enforcement and prisons, but that can and will be another discussion. It's the same old story, booze and liquor play a pretty large part of the tax picture in the US, don't have stats, but we all know what big business it is.

We do need to get government under control and operating at much more effective level and that's the real challenge for the 3 or 4 presidents. With our general population getting older and immigration of all sorts getting higher, the USA will be a very different place to live in years to come.

For the moment big pharmacy isn't in the picture, that's going to change in under ten years. I believe we'll see 5 packs of med cannabis being sold at drugstores for prices comparable to tylenol today..might be in an unexpected form as research continues ( might get down to a skin patch).

For the very short term future, we need cash to support a number of public programs, and that's where the mcp comes in with our very unique non-profit model.

I agree, take the money away from the cartels, get a big change in federal policy(off sched 1 for sure), allow patients and producers bigger limits ( the current limit is why prices are still at street level, I had a long discussion with the director of the mcp about pricing a few months ago) If producers could have large operations, prices would fall exponentially to production costs, it's simple economics.

You don't see much tobacco or alcohol smuggling these days, there is simply no money it it ( you do see some cigarette smuggling since the state tax plans vary so much).

The AMA reversal was a very big step, Obama was a very big step, all the new states coming on board is huge, we're on the verge of big changes in the USA and when the baby boomers start retiring in the next few years things are going to start moving very very fast.

For the point of this particular discussion, the MCP program is going to bring a significant amount of GRT into state coffers at current grow limits. I'm sure once producers can maximize their yields the state will be happy with the revenue

Hemp is am amazing industrial product, shame is we're still in the 30's mentality politically, it can be a solution for many many things wrong with how we do business in the USA.

At some point I'ms ure there will be a producer forum somewhere. I'm looking forward to those discussions.

[bedrockbob]

Oh man, I believe that this should be for the people. I shudder to think that legalization will relegate us to smoking corporate pot. The same people that have taken the chances, payed the fines, and kept hope alive during prohibition should be the ones to profit from growing the herb. It is the affliction of the common man. The common man has been milked until he is dry. Marijuana production should be kept fractionalized so that small business and small producers have the edge.

It is like the gold rush. Production of marijuana in profitable amounts is within reach of a single person, a family, or a small group. The big pharma companies have no business further enriching themselves on it. They are talking about helping small business and how that would really jump start the economy...I agree! Jump start a 100 square foot maximum for personal growers and let the Feds worry about the plant count. Go ahead and extend prohibition but only for the PHARMA companiesâ?¦Throw THEM in jail for growing pot. Give â??em ten years for cultivation and take their property away if they dare plant a seed.

There is a huge industry out there within reach of the common American. It is as big as oil, as big as the auto industry, and as big as all other vegetable crops combined. it needs no stimulus package, no government funding, nada. Just the ability to do it without jail time.

I would rather smoke shitty cartel rope than light up a corporate joint. It is for the people man! Legalize!

[axlom69]

To realy understand this issue you peep's need to talk to an accountant about how it will be taxed both on the state level and the fed level. The fed's steal see it as illegal there for the tax just for the fed side in 35% a year, just to stay opened. So yes we do have to pay tax on are med's weather we like it are not.

[coolslayer]

Bob, I appreciate your comments here on cannbis.com. I'm doing ok today so I've done a little research on the senator, a first term politico. I can't seem to find anything that indicates he in favor of the MCP. Just a ditty that he said his proposal is up for killing.

If you have anything that shows that the senator is pro MCP, please provide a reference to it. I'd like to see a state senator on our side for a change.

In my letter to the senator I suggested that a collection of GRT would not be inappropriate since it directly benefits the taxpayers of the county where it is collected and 5-7% is not unreasonable, since the dispenary will depend on county services for police and fire protection.

GRT is already being collected from what I've seen.

Being a first term politico, he had to unseat an incumbent I assume so I hope he's not simply trying to attract some attention here. As you said Bob, there are numerous places to save money in New Mexico.

I proposed the very unpopular excise tax on DUI licenses and registrations, something that will make far more money for social programs.

Let's not forget our MCP program is non-profit, the excess funds collected will be going to some approved charity or NM state program. If the state collects this proposed tax, it goes to a general fund, where the people that need the most help likely won't see a nickel.

Now if the senator would propose something that would increase the funding to the mcp directly, he'd have my full support. I suggested raising dispensary license renewals to 5k after the first year, giving new providers time to get on their feet and build a reserve in the case of a crop failure.

Can any dispenser survive a back to back infestation of spider mites or mold?, utilities still have to be paid. If they can't after a year in business, perhaps they need to move to some other type of agriculture.

that's all for now. i gotta take a nap.

A problem that I foresee with that is that the Producers will have to pass at least some of the cost of the added tax on to the patient/consumer and it is already difficult enough for patients on a fixed income w/medical bills to pay for their medical cannabis.

[patient4200]

it seems that because this tax won't/can't be applied to marinol, it give Marinol a tax advantage in that the price of the fda approved prescription med won't be affected.


One thing I was a little shocked to see was how poorly the bill was written

in one citing they called for retention of invoices for three years...oops the state can audit records back for 7 years.

The costs of administering the new tax are high also, new tax forms new audit procedures and so on.

Interesting stuff to say the least.

The lowest impact method would simple as I've said before collect GRT to support the local communities where the producers operate, and raise the renewal fees for producers to help directly fund the DOH program.

As you'll see in another thread, the proposal was shelved by a wide margin with a patient and a producer both speaking out as to the impact. The big vote down (14-1) tells me that the reps heard from some voters and decided to let things ride for a while before they make another attempt at sticking their hands in the bag to put money into the general fund.

When there are dozens of producers and thousands of patients they can get away adding a small 1-2% surcharge, as it's possible prices won't remain at street levels forever. I somehow think they will stay at current levels for some time, unless the feds get rid of the 95 plant limit and producers can leverage their infrastructure into a high level and grade of production.

Sorry to say I can't see that happening for a while, so producers will spend big bucks for small yields which means prices stay where they are for a good long while.

Still like this better then the California model where some people get uber rich and patients still pay 10+ a gram.

Still a good time to write the senator.....register to vote and let him know where you stand. More funding for the mcp and other public health programs and no new excise tax on the MCP. Tax DUI instead!

[coolslayer]

That's for sure!