Opinion: Why Is Cannabis deemed an “Essential Business” in California?
With the out break of corona virus, many retail businesses in the state of California are being forced to shut down. While the majority of businesses close their doors for an undisclosed period of time, some businesses have been deemed “essential” by the state, and have been allowed to remain open. It has been heavily debated by California law makers, whether or not cannabis dispensaries should be deemed an essential business.
California is at the forefront of the cannabis revolution, they were the first states to decriminalize the sale and possession of cannabis. This monumental law change occurred back in 1996 with the passing of proposition 215, also known as the Compassionate use act of 1996. Dozens of other states slowly followed in California’s footsteps, decriminalizing cannabis for medical purposes. Under this model, patients can obtain a prescription or “medical marijuana card” from their primary care doctor.
Proposition 215 was the law of the land in California for 20 years, until 2016 when prop. 64 was passed. Prop 64 or “the Adult use of Marijuana act” effectively erased prop 215, meaning that all of the existing medical cannabis dispensaries or producers had to apply to become recreational operations. Thousands of long standing cannabis companies, mom and pop shops, and small operations were forced to quit entirely, as it became apparent that millions of dollars were needed to apply to produce or supply cannabis recreationally.
With thousands of shops, caregivers, and operations closed down, millions of medical marijuana patients throughout the state of California are now forced to purchase their medical marijuana through recreational dispensaries. that means that every person who relies on cannabis as a medicine, whether it be for PTSD, cancer, insomnia, chronic pain, seizures, or any other qualifying condition, utilizes these recreational facilities for their medical cannabis.
Under the state of California’s law, recreational cannabis users can hold up to one ounce of cannabis, while medical cannabis users can hold up to a half pound. While this half pound quantity is enough to last most patients multiple months, for people living pay check to pay check, it is difficult to afford a half pound supply of medicine. With the economy at an all time low, and unemployment at an all time high, it is harder than ever to afford basic necessities, which for some people, includes cannabis. This forces most medical cannabis users to purchase their medicine weekly or bi-weekly, as they can not afford a multi-month supply. Similar to other life-saving medications like insulin, due to the exceedingly high prices of certain medications, patients are limited to purchase only what they can afford. Affordability issues are even worse in the case of cannabis because some areas in California tax as high as 30% for medical users.
For medical cannabis patients, having access to their medicine is essential; therefore dispensaries must remain open. However, most dispensaries are burdened by a high entry fee and potent black market, causing them to struggle to remain open and keep up with their bills. most dispensaries are barred from being able to open a bank account, process credit cards, or use many other financial services. this means that cannabis business will not be eligible for government loans, bail outs, stimulus money or any sort of financial assistance. Furthermore, many cities and municipalities throughout California have application fees, monthly fees, annual fees, and other crippling hidden expenses. For example, many counties in southern California charge as much as $50,000 just to apply to become a recreational cannabis business. This is a non refundable application fee, whether or not the business is approved.
Cannabis in California is more essential now than ever before. With unemployment over 20% and so many people struggling financially, it is harder than ever for medical cannabis patients to afford their medication. Therefore, we must make access to cannabis as easy as possible for people who are already struggling to make ends meet. Many people have even proposed a temporary removal of medical cannabis tax during this tough financial crisis. It is also clear that federal laws need to change allowing cannabis businesses access to loans, stimulus money, and even banking. Without these financial incentives, Cannabis businesses are being forced to pay higher tax rates than any other industry without reaping the tax benefits that they are egregiously paying into.