In this post, our CEO, Mark Hadfield talks about the impending cannabis legalization vote in November. Will cannabis go legal, and if so, what are the ramifications? Will you need a medical recommendation after the vote? What will happen with taxation? As a true cannabis industry insider, Mark gives his insights on the state of cannabis legalization and where we might find ourselves post November ballot on Prop 64.
One thing we hear a lot about, is the impending vote for legal recreational cannabis in California, now on the ballot for 8th November, 2016. This legislation – known as Prop. 64 (Adult Use of Marijuana Act) – would enable any adult over the age of 21, to legally purchase cannabis without a doctor’s recommendation, along with certain tax provisions as well as enacting some restraints on monopoly type business interests.
The Yes side is very well funded with over $11m raised as at September 1st, 2016. The opposition has raised just $200,000. At time of writing 60% of Californian’s support the legalization of recreational marijuana with just 37% against. It’s not guaranteed, but it looks very likely to pass in November.
There is a misconception that after the November vote, one should just be able to walk into a dispensary and make a purchase (without a doctors note). The truth is that implementing Prop. 64 will be a complex and lengthy process that for the most part, has not yet even been planned for. Regulators have not started the planning, because they don’t know what will be in the final legislation, should it pass. With a state the size of California, along with the various business and lobbying interests fighting for their piece of the pie, the reality is that it will take at least twelve months and perhaps longer before the first legal recreational outlets are available. A good working estimate from most we have talked with, is not before January 2018.
In the meantime, you will continue to be able to purchase your cannabis, so long as you are a qualifying medical patient with a valid doctor’s recommendation.
One of the reasons lawmakers are interested in recreational cannabis, is because of the opportunity to tax sales, and thus increase budgets for needy projects. Prop. 64 outlines a 15% sales tax, as well as a $9.25 per ounce on growers for flowers, and $2.75 per ounce of leaves. Additional costs may arise through the enforced three tier distribution model, as well as additional taxes which may be levied by local government bodies. All of this could increase the price of recreational marijuana by as much as 30% or more to the consumer, while for the most part medical consumers are largely exempted from taxes (while still may be impacted by other market forces).
Studies show the that regular users can spend up to $1,800 per year on cannabis today (which could increase by $540 in taxes and fees), or simply reduce the amount that a person could afford. With the price of an annual doctor’s recommendation around $50, there appears to be a strong financial incentive to maintain your medical status, should you have one. Indeed, this has been the case in Colorado where more than two years since recreational marijuana was implemented, around 40% of people still maintain their medical patient status (where effective taxes are between 15% and 25%).
Looking again to Colorado for guidance on what might happen in California after the vote, one thing many don’t realize is that you have access to different products (and advice) when you are a medical patient vs a recreational user.
When visiting a dispensary in Colorado, you are immediately asked at the door upon entry whether you are a medical, or a recreational user IE: are you a holder of a medical card? If the answer is yes, you are allowed entry to the ‘medical section’ of the store, where a greater product selection, and one more medically targeted is available to you. Additionally, the advice offered on product selection may be different for medical users.
Recreational users have to enter through to the recreational side where products tend to be less strong and less varied in terms of consumption methods or options for CBD heavy products, and advice which is more tailored towards recreational users.
Under the law in California, a medical marijuana patient is one who has been diagnosed with a serious medical condition, whereby the therapeutic use of cannabis is recommended by a doctor with a license in good standing with the medical board.
Beyond the legal definition however, things become a little less clear. If I have a medical recommendation for a qualifying condition that comes and goes, but I like to use cannabis on a Friday night to relieve stress and help me sleep, am I am medical user, or a recreational one?
What if I use cannabis instead of wine when people come over for dinner (because I want to reduce my sugar intake) or I simply want to drink less alcohol. Is this recreational or medical? What if the reason I want to reduce my sugar intake, is because I am overweight? What if it’s because am diabetic? Is this medical?
At HelloMD, we believe that millions of people could (and will) benefit from the therapeutic use of cannabis for their health & wellness. With 110 million Americans suffering with chronic pain alone, this number could far exceed the number of people who are clearly recreational users. Think about health concerns related to PMS, pre-menopausal symptoms, migraines, anxiety, insomnia; the list goes on and on.
If you are someone who identifies with one of the examples given above, you may well value continued access to quality medical advice from a licensed doctor, an excellent medically focused product selection, and lower prices for your medications, regardless of what the law allows after the November vote (and whatever time it take to get implemented) thereafter.
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