Starting March 1, 2020, a new California law allows cannabis retailers to donate free medicinal cannabis or medicinal cannabis products (medicinal cannabis) to medicinal cannabis patients, or cannabis licensees may donate free medicinal cannabis to cannabis retailers for subsequent donation to medicinal cannabis patients, without payment of certain taxes (see Senate Bill 34).
Persons who Qualify as a Medicinal Cannabis Patients.
A medicinal cannabis patient is a qualified patient who possesses a qualifying physician’s recommendation, or a qualified patient or the patient’s primary caregiver with a valid Medical Marijuana Identification Card issued by the California Department of Public Health.
What Taxes will NOT Apply to Donated Medicinal Cannabis?
· The cultivation tax will not apply to medicinal cannabis when the cultivator designates for donation in the California Cannabis Track‑and‑Trace system.
· The cannabis excise tax does not apply when a cannabis retailer donates free medicinal cannabis to a medicinal cannabis patient.
· The use tax will not apply when a cannabis retailer donates free medicinal cannabis to a medicinal cannabis patient, or when another licensee, such as a distributor or manufacturer, donates free medicinal cannabis to a retailer for subsequent donation to a medicinal cannabis patient.
Protect Your Self and Your Donation. Call our office Today! Let Our Office Prepare the Proper Certification BEFORE you Donate.
The new Law provides that a cannabis licensee that receives medicinal cannabis for donation must certify in writing to the licensee donating it that the medicinal cannabis will ultimately be donated to a medicinal cannabis patient.
When taken in good faith by the licensee donating the medicinal cannabis, the written certification relieves:
· The cultivator from the liability of the cultivation tax.
· The manufacturer from its responsibility to collect the cultivation tax from the cultivator.
· The distributor from its responsibility to collect the cultivation tax from the cultivator and the cannabis excise tax from the retailer.
· Each licensee from liability of the use tax when donating the medicinal cannabis.
What Happens if Cannabis Licensee that Receives Medicinal Cannabis for Donation ultimately SELLS the Medicinal Cannabis?
If a cannabis licensee certifies in writing that medicinal cannabis will be donated to a medicinal cannabis patient and later sells or uses the medicinal cannabis in some other manner than for donation, the certifying licensee will be liable for any taxes that would be due, including the cultivation tax, cannabis excise tax, and use tax.
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