Tucson Progressive

Pamela Powers Hannley, a progressive voice for Arizona

Update on proposed 300% medical marijuana tax

Wednesday evening, I posted a story about the proposed 300% tax on medical marijuana, which blew up in the Citizen comments section and on state representatives’ facebook pages over night.

The story in today’s Arizona Daily Star corroborated my story and offered more details.

Basically, Attorney General Tom Horne is using a loophole in Prop 203 (the medical marijuana law that voters passed in 2010) on which to base his sales tax ruling. The law says would-be medical marijuana patients can get a “doctors’ recommendation” for the drug– not a prescription. Prescriptions are not taxable; doctors’ recommendations are. (This is like saying your doctor recommended aspirin or multi-vitamins; when you go to buy the aspirin or multi-vitamins, they are subject to sales tax.)

Horne estimates that applying Arizona’s base sales tax + any applicable city sales taxes could bring in $40 million, a figure he extrapolates from sales in Colorado.

OK, fine, charge regular sales tax. My real issue is with Democratic State Representative Steve Farley’s proposal for a 300% sales tax on medical marijuana. Farley justifies this rate because it is the same rate as the state charges for cigarettes. There are several disconnects here.

  • Tobacco is highly addictive and kills more people in the US than all other substances combined. Public health advocates have pushed for ever-high tobacco taxes to encourage people to quit; cost is a research-based strategy. Originally, in Arizona and elsewhere, these tobacco tax revenues were used to prevent teens from starting to smoke, to help people quit smoking, and to treat the indigent with tobacco-related diseases. Arizona and other states have just about wiped clean all those public health programs.
  • Medical marijuana is a medicinal plant which provides palliative care to seriously ill patients, and its use by patients will be guided by a physician. It is not a life-threatening drug like tobacco. (Seriously, if the government took an honest look at the death and costs associated with tobacco-smoking, IT would be illegal.)
  • Why would you apply a tax rate that is designed to discourage use of a dangerous product to a plant that helps cancer and AIDS patients with their treatment?

I agree with Andrew Myers, who managed the Prop 203 campaign, when he says the 300% tax would put medical marijuana pricing out of reach of most people– thus killing the goose that laid the multi-million-dollar golden egg– and when he disputes Farley’s $40/ounce base price for medical marijuana. Myers calls $40/ounce a “myth”; I’d call it 1975 pricing. My sources near the university say marijuana is sold for $40-60 for 1/8 ounce.  Let’s do the math for the low end price…

$40 (per 1/8 oz) x 8 = $320/oz x 2.5 oz (the amount people are allowed to buy every 2 weeks) = $800 x 300% sales tax = $2400 every 2 weeks.

This pricing would encourage the continuation of street sales. I think medical marijuana should be taxed the same as other herbal remedies (ie, ginkgo biloba, echenichia, St. John’s Wart, garlic, etc.)– 6.6% + applicable city taxes. (I can’t believe I just sided with Tom Horne.)

From the Star article…

“We’re not wild about the idea of increasing the cost of what essentially is medication for seriously ill people,” he said, but no challenge is planned.

But Myers said what Farley wants would be challenged as illegal.

He said it’s one thing to tax marijuana like other products. A special tax, Myers said, runs afoul of a constitutional provision barring lawmakers from altering voter-approved measures.

Farley, however, said the tax is justified. He said a 300 percent levy puts the tax on marijuana at the same general level as the tax on cigarettes, which are subject to a $2-per-pack levy.

“People use cigarettes as an over-the-counter medication for various types of things,” he said. He also doubts imposing the tax alters what voters approved.

Anyway, Farley said, those who really need the marijuana won’t mind paying the extra fee. He figures marijuana sells for $40 an ounce, meaning the sales price, tax and all, would be $160.

Myers said $40 marijuana is a “myth,” and the actual price at dispensaries will be 10 times that, putting medical marijuana out of reach of many in need, particularly since the drug is not covered by health insurance.

25 comments on “Update on proposed 300% medical marijuana tax

  1. tiponeill
    January 27, 2011

    It isn’t just Farley – it is all them Dems.
    Looks like I need to switch to Independent to – I can’t believe I donated to these clowns.
    Who would have thought that Dems would want a Tax the Sick bill ?
    I would expect it from Repubs.


  2. Emp
    January 27, 2011

    Um… I can get a $40 ounce right now… I guess the dealers will still be doing just fine if the State is gonna tax the crap out of it. Once again… people who obey the law will be punished while the ‘criminals’ who sell it make the profit… Typical stupid government ran by stupid people voted in by stupid citizens.


    • BigMike
      January 28, 2011

      $40 an ounce?  Must be some B-Schwaps! Medical grade goes for $300/oz


  3. tiponeill
    January 27, 2011

    Aboud’s office has promised to call me back – I suspect this is all a brain fart on Farley’s part and others signed on without thinking.


    • Pamela Powers
      January 27, 2011

      Yes, I think it was not thought through. Just because tobacco and medical marijuana both can be smoked doesn’t mean they should be taxed the same. Tobacco is a serious public health problem worldwide, causes hundreds of thousands of deaths each year in the US alone, and costs citizens– and the government– millions in medical bills.


  4. Conservative Christian
    January 27, 2011

    Jesus said to treat other people the way we would want to be treated.  I know that if I were ill, I wouldn’t want a big tax thrown onto my treatment. I wouldn’t want my aging parents to have to pay a big tax just to get something that helped with the aches and pains of getting older.
    Let’s treat other people the way would want to be treated.


  5. Robert
    January 27, 2011

    Ditch/Imported   $40-60 / oz
    Mid grade, if available, $100-150 / oz
    High grade, west coast pot $250-300 / oz


  6. tiponeill
    January 27, 2011
    • JoeS
      January 27, 2011

       The dems will tax you to death,   here is the proof…


  7. JoeS
    January 27, 2011

    While this crowd likely does not care,  has anyone thought how marijuana use is going to impact their exercise of the 2nd Amendment?


    • tiponeill
      January 27, 2011

      No sane person obsesses over “their exercise of the 2nd Amendment”


  8. Mickey
    January 27, 2011

    Farley and the rest of the scum down there need to contract a virulent disease.   I pray this happens for them.


    • JoeS
      January 27, 2011

      Praying for harm to elected officials is counter to the new era of civility.

      Please refrain


  9. James Markes
    January 27, 2011

    Attorney General Tom Horne apparently wants to subsidize and encourage the gangs and black market dealers by forcing patients to go through the black market.


    • tiponeill
      January 27, 2011

      >Attorney General Tom Horne apparently wants to subsidize…
      It isn’t Horne – it’s the Democrats 😦   They want to tax the sick


      • JoeS
        January 27, 2011

        Thanks for not jumping on the “Horne wants to tax pot 300%” bandwagon.

        I’ve no doubt you have plenty of reasons to dislike the man w/o having to make stuff up.


  10. Luke Luciano
    January 27, 2011

    Tom Horne just said that it should be taxed at 6.6%. It was the the 3 Democrats that proposed the bill for 300% that you should be talking about!
    Read here: http://arizonamarijuanadispensary.com/?p=271


  11. Pingback: Drug Cartel Empowerment Act: Arizona Legislature proposes 300% sales tax on medical marijuana - Tucson Progressive

  12. Pingback: UA continues marijuana ban – Arizona Daily Wildcat » AZ Green Medication

  13. Pingback: UA continues marijuana ban – Arizona Daily Wildcat » AZ Green Medication

  14. Pingback: UA continues marijuana ban – Arizona Daily Wildcat » AZ Green Medication

  15. Pingback: Arizona Main Stream Media Silent on HB 2557 & the Proposed 300% Tax on Medical Marijuana | Arizona Medical Marijuana Law

  16. Pingback: UA continues marijuana ban – Arizona Daily Wildcat » AZ Green Medication

  17. Ms Lin
    January 30, 2011

    See they think of pot as a recreational drug, not as medicine
    the only way to ethically charge 300% is to legalise it as recreational drug, like tobacco or alcohol.
    But it is obviously unethical to call it medicine, and then charge 300% tax, as if it were harmful.
    We’ve got a long road ahead


  18. Pingback: Medical marijuana to be taxed in Arizona – Bloomberg » AZ Green Medication

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The Tucson Progressive: Pamela Powers Hannley

I stand on the side of Love. I believe in kindness to all creatures on Earth and the inherent self-worth of all individuals--not just people who agree with me or look like me.

Widespread economic and social injustice prompted me to become a candidate for the Arizona House, representing Legislative District 9 in the 2016 election. My platform focuses on economic reforms to grow Arizona's economy, establish a state-based public bank, fix our infrastructure, fully fund public education, growlocal small businesses and community banks, and put people back to work at good-paying jobs. I also stand for equal rights, choice, and paycheck fairness for women. I am running as a progressive and running clean.

My day job is managing editor for the American Journal of Medicine, an academic medicine journal with a worldwide circulation. In addition, my husband and I co-direct Arizonans for a New Economy, Arizona's public banking initiative. I am a member of the national board of the Public Banking Institute, and I am co-chair of the Arizona Democratic Progressive Caucus, the largest caucus of the Arizona Democratic Party.

I am a published author, photographer, videographer, clay artist, mother, nana, and wife. I have a bachelor's degree in journalism from Ohio State University and a masters in public health from the University of Arizona. I grew up in Amherst, Ohio, but I have lived in Tucson, Arizona since 1981. I am a proud member of the Unitarian Universalist Church of Tucson and the Public Relations Society of America.

My Tucson Progressive blog and Facebook page feature large doses of liberal ideas, local, state, and national politics, and random bits of humor. I also blog at Blog for Arizona and the Huffington Post.

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