New tax, regulations proposed for medical marijuana

By BROOKE KANSIER
Capital News Service
LANSING – Medical marijuana patients might have a bit harder time paying for their pot if tax legislation that recently passed the House becomes law.
Current medical marijuana regulations don’t include any tax on the drug, but that could change under a three-bill package that passed the House in a landslide vote.
One sponsor, Rep. Mike Callton, R-Nashville, also a chiropractor, said the legislation is an important move for Michigan as the possibility of legalization looms.

“We need to address this before it addresses us,” Callton said. “What happens in some places that legalize is you have no laws, no regulatory structure. It was really hard for them to get Pandora back in the box.
“It’s really not if, but when.”
The proposal would make medical marijuana the only taxed “prescription” medication in Michigan, said Rep. Jeff Irwin, D-Ann Arbor.
“I just don’t think that medicine should be taxed,” he said.
Technically, patients don’t get prescriptions, but they need a doctor’s recommendation to qualify for Michigan’s program, Callton said.
“I know you hear this beef – other prescription drugs aren’t taxed,” he said. “But it’s not really a prescription drug.”
Co-sponsors of his bill include Reps. John Kivela, D-Marquette; Peter Pettalia, R-Presque Isle; Scott Dianda, D-Calumet; Jon Bumstead, R-Newaygo; Phil Potvin, R-Cadillac; and Sam Singh, D-East Lansing.
Callton said the tax would go toward the cost of enforcing the new regulations, including health department and police inspections.
Marijuana is most often recommended as a palliative, or pain reliever, for ailments like glaucoma, nerve pain, Crohn’s disease and cancer. It’s undergoing testing trials for multiple sclerosis, Alzheimer’s and autoimmune diseases like HIV/AIDS, according to the National Institute on Drug Abuse.
Along with a 3 percent tax, the legislation would implement a tracking system to regulate growers and sellers, introducing licensing and guidelines for dispensaries and close a loophole in the original law that banned non-smokable forms like extracts and edibles.
“The law does not address dispensaries or drug quality or composition,” said Michael Loepp, communications representative for the Department of Licensing and Regulatory Affairs, speaking of current state law.
Irwin said the tax and other proposed changes could make the drug more expensive – and it’s not cheap now.
“Look at a patient that needs to take a one-gram hash oil pill per day. That gram in a dispensary today may cost anywhere between $40-$80 – let’s be conservative and say it costs $50,” Irwin said. “So $50 a day, $1,500 a month and over the course of a year, it’s $18,000.”
Michigan doesn’t tax items deemed “necessities,” like food. Prescription medications fall under that category.
Irwin said the problem is exacerbated because Michigan’s patients receive no outside help with cost. Insurance doesn’t cover medical marijuana.
“Through insurance, we’ll pay for their opioids, their Vicodins – whatever hardcore pharmaceutical they want,” Irwin said. “But when it comes to medical marijuana, they have to pay out of pocket. When you add a tax to that, it gets pretty outrageous.”
Michigan has 182,841 active registered patients, and 33,944 active caregivers –who help patients with medical use – according to Loepp.
Callton agreed that marijuana is a better alternative to the more mainstream treatment for pain: strong, addictive opioids.
“I would rather see people taking that for pain than some kind of opioid analgesic – they’re very addictive, and you can end up with heroin addicts. I don’t think marijuana is a gateway to heroin – it’s these opioid analgesics, because they’re using the same receptors.”
Callton added that eventually, he’d like insurance to cover medical marijuana.
The plan’s 3 percent tax is down from a proposed 8 percent after negotiations in the House. A provision to end the medical tax if the drug is legalized for recreational use was also added.
Callton said, “If we legalize, that will produce so much money. You’re going to be dealing with sin taxes – 30-40 percent like in Colorado possibly – and that will more than offset costs for the entire program, even the medical program.”
Irwin said the legislation could have unintended consequences.
“The big lesson that we’ve learned from Colorado and Washington is if you have too high a tax and you layer on too much bureaucracy, you push people into that black market, rather than drawing them into that legal market,” he said. “It’s going to fuel black market sales and drive down the price of black market marijuana, which creates a further problem for the legal market.”
Matthew Abel, executive director of Michigan’s branch of the National Organization for the Reform of Marijuana Laws, agrees. The organization advocates legalization.
“As you make it too expensive, it’s a disincentive to comply with the legitimate system,” he said, adding that the Legislature isn’t “doing anything to end the underground market.”
The bills passed the House by wide margins with at least 95 votes, and are awaiting action in the Senate Judiciary Committee.
ADDITIONAL RESOURCES FOR CNS EDITORS
House Bill 4209: http://www.legislature.mi.gov/%28S%28u45q5h2cakxtsc101u3umkeu%29%29/mileg.aspx?page=GetObject&objectname=2015-HB-4209
House Bill 4210: http://www.legislature.mi.gov/%28S%28zd2bna51hexok2j2simvqe3v%29%29/mileg.aspx?page=GetObject&objectname=2015-HB-4210
House Bill 4827: http://www.legislature.mi.gov/%28S%28vx5bkx05rd313jeny4zm5zcr%29%29/mileg.aspx?page=GetObject&objectname=2015-HB-4827