This bill is part of the 2019 Cannabis Bills section of our ongoing update on California Cannabis Legislation – see the full California Cannabis Law Legislative Update which includes information on cannabis bills from other years.
SB 34 (Wiener D) Cannabis: donations.
Existing administrative law prohibits a retailer licensee from providing free cannabis goods to any person or allowing individuals who are not employed by the retailer to provide free cannabis goods to any person on the licensed premises. Existing administrative law provides an exception to this prohibition for specified medicinal retailer and microbusiness licensees to provide access to medicinal cannabis patients who have difficulty accessing medicinal cannabis goods, as specified.
This bill, the Dennis Peron and Brownie Mary Act, would similarly authorize those specified licensees to provide free cannabis or cannabis products to a medicinal cannabis patient if specified requirements are met, including that the cannabis or cannabis products otherwise meet specified requirements of MAUCRSA. The bill would authorize those specified licensees to contract with an individual or organization to coordinate the provision of free medicinal cannabis and medicinal cannabis products on the retailer’s premises.
Existing sales and use tax laws impose use taxes on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, presumes tangible personal property purchased outside the state that is stored, used, or consumed in this state is purchased for use in this state, and provides various exemptions from those taxes.
This bill, on or after the operative date of the bill, and until January 1, 2025, would exempt from the use tax the storage, use, or other consumption in this state of medicinal cannabis or medicinal cannabis products that are donated, for no consideration, under specified circumstances. The bill would require the exemption to apply only if the donee certifies in writing, as specified, that the medicinal cannabis or medicinal cannabis product will be used as specified. The bill would make a licensee that uses the donated medicinal cannabis or medicinal cannabis product in some other manner, or for some other purpose, liable for the payment of use tax and would make the measure of tax the licensee’s purchase price for similar product.
AUMA imposes an excise tax on the purchase of cannabis and cannabis products, as defined, at the rate of 15% of the average market price of any retail sale by a cannabis retailer.
The bill would require that these provisions not be construed to impose an excise tax upon medicinal cannabis, or medicinal cannabis products, donated for no consideration to a medicinal cannabis patient, as specified.
AUMA imposes a cultivation tax on all harvested cannabis that enters the commercial market upon all cultivators. Existing law defines entering the commercial market to mean cannabis or cannabis products, except for immature cannabis plants and seeds, that complete and comply with specified quality assurance review and testing.
This bill would prohibit the cultivation tax from being imposed on medicinal cannabis designated for donation. The bill would make a licensee that certifies in writing that medicinal cannabis or a medicinal cannabis product will be donated to a medicinal cannabis patient and sells or uses the medicinal cannabis or medicinal cannabis product in some manner, or for some purpose other than donation, liable for the cultivation tax. The bill would specify that the certification in writing relieves the cultivator that donates the medicinal cannabis from liability for the cultivation tax and the distributor from liability for collecting the cultivation only if the certification is taken in good faith. The bill would prohibit a distributor or a manufacturer from collecting or remitting the cultivation tax for medicinal cannabis or medicinal cannabis products designated for donation. The bill would require a cultivator to keep records of any medicinal cannabis or medicinal cannabis products designated for donation. The bill would require that the cannabis tax provisions not be construed to impose a cultivation tax upon medicinal cannabis or medicinal cannabis products designated for donation.
Read more about California Cannabis Legislation – see the full California Cannabis Law Legislative Update.
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