SB 302 expands the Compassionate Use Act

S B 302, which has passed the Senate Floor, would amend Health and Safety Code Section 1649.1. This bill was introduced by Senator Stern and co-authored by Senator Wiener.

Health and Safety Code Section 1649.1 was enacted as part of the "Compassionate Use Act" of 1996, when California Proposition 215 was approved at the Nov. 5, 1996, statewide general election.

Currently, Section 1649.1 defines "health care facility" the same as that specified in Section 1250 (a), (c), (f), (i), or (n).

Section 1649.1(b)(2) provides that "health care facility" does not include a chemical dependency recovery hospital or a state hospital. [Emphasis added].

Section 1649.1(c) defines "medical cannabis" as cannabis or a cannabis product used in compliance with the Compassionate Use Act of 1996.

Section 1649.1(d) defines "patient" as an individual who is terminally ill.

Section 1649.1(e) defines "terminally ill" as a medical condition resulting in a prognosis of life of one year or less, if the disease follows its natural course.

SB 302 makes some very important and notable changes to Section 1649.1.

First, a subsection (a) is added above the prior subsection (a), which is moved to subsection (b). The proposed (a) defines "chronic disease" right away as "a condition that lasts one or more years and requires ongoing medical attention or limits the activities of daily living, or both."

Second, "patient" does not mean an individual who is terminally ill or who is over 65 years of age with a chronic disease.

These are significant changes as they allow for treatment of chronic disease as defined above for patients 65 and over, instead of only those with a terminal illness. Prior to this change, a patient was required to be terminally ill as previously defined to receive medical cannabis under the Compassionate Use Act. The current statutory definition of terminally ill limits treatment to those situations in which a patient is not likely to live beyond one year. However, there are many patients who suffer from chronic illness and may suffer for years, without treatment. The proposed amendment would change that. The amendment would help to alleviate pain and suffering for many more patients with chronic illness who may live many more years.

One may be wondering why this matters in California, since cannabis was legalized pursuant to Proposition 64 on Nov. 8, 2016, for adults 21 and over. While this is true, legalization also brought with it an onslaught of state taxes. These taxes can pile up and can be especially taxing for California's elderly population, especially those with a chronic illness.

Beginning Jan. 1, 2023 (15% (subject to change in 2025) an excise tax was imposed on all retail sales of cannabis products in California. After the excise tax is computed and added to the selling price, sales tax is then computed on top of that. The state sales tax rate is 7.75%, but this amount can vary by city and/or county. For example, in the county my office is located in, Contra Costa, the cannabis business tax is 4%. Martinez, a city within Contra Costa County, has a sales tax rate of 9.75%.

So, in Martinez, the computation of tax would look something like this:

The cost for cannabis in this example went from $50.00 to $71.94 - an effective cost increase of 43.88%. This type of cost increase would stifle purchases by most individuals. This cost increase is especially burdensome for elderly retired persons, particularly those with chronic disease who likely have ongoing medical costs to deal with as well.

Expanding the statute to include not only those with terminal illness, as defined under the current statute, but those to 65 years of age and older with chronic illness is extremely helpful for these individuals. This statute would allow more elderly people with a chronic illness to obtain registered medical cannabis cards. If individuals are able to obtain a medical cannabis card that is registered with the state, they will be exempt from sales tax.

Then, under the example hereinabove, the total cost would be $65.55, instead of $71.94. This would make the total effective increase in cost 31.1% instead of 43.88%, which when ongoing purchases of medicinal cannabis are needed for health maintenance can really add up.

This would be a tremendous benefit for our elderly population in California and would provide much needed care and medicine at a reduced overall tax rate.

This is also good tax policy. The Compassionate Use Act of 1996 was enacted for purposes of providing much needed medicine to certain individuals in California's population. Expanding this to others in need of this medical care is in line with the overall intent of the act. Providing a tax exemption for certain individuals who qualify under the Act is also in line with this intent as it relieves some of the tax burden for individuals who need this medical care and who may not have as many resources to pay higher taxes.

California's population voted to ameliorate suffering for so many of our citizens when the Compassionate Use Act was enacted, and it seems most Californians have accepted that cannabis has medicinal properties that can alleviate pain and suffering for many.

SB 302 is currently pending before the Assembly.