Cannabis operators may soon be spared the arduous lengths to which they must go just to pay their taxes.
State Sens. Toni Atkins and Scott Wiener hope their Cannabis Safe Payment Act — introduced Tuesday as SB 148 — will ease that burden by expanding the number of sites that accept cannabis-related taxes and fees.
Because the federal government still treats cannabis as a Schedule 1 drug, banks balk at opening accounts for cannabis businesses.
The Board of Equalization, California’s tax collector, processes some $40 million in medical cannabis sales taxes each year through its 22 offices scattered across the state. Even mid-size dispensaries find themselves hauling gaudy sums.
“It’s just not comfortable driving with $20-, $30-, $40-grand to make these payments, sometimes all in $20 bills,” said Alex Scherer, owner of the Southwest Patient Group dispensary in San Ysidro.
San Diego’s office is just north of Poway. The nearest others are in Palm Springs and El Centro. For huge swaths of the state, cannabis operators are hundreds of miles from the closest BOE office.
At Will Senn’s dispensaries in San Diego, tax payments are taken off site and kept under 24-hour surveillance — with security guards, alarm systems and cameras — to await delivery at tax time. All told, the precautions cost him thousands of dollars.
“If we’re driving down the street and something happens to that cash, we’re in a serious situation,” said Senn, who is also co-founder of the United Medical Marijuana Coalition. “It’s just not safe, for anybody. We want to do everything 100 percent above board, and we shouldn’t have to fight just to pay our taxes.”
The cash conundrum will get even more complicated next year once the state’s long-awaited licensing framework kicks in, when cannabis operators will face an array of fees to any of nearly a dozen agencies, many of which have few if any offices outside Sacramento.
The Safe Cannabis Payment Act would broaden the kinds of payments that the BOE can collect. It would also allow counties and municipalities to empower their tax-collecting entities to accept state cannabis payments.
Fiona Ma, BOE chairwoman, helped craft the bill. Todd Gloria, D-San Diego, is co-authoring it in the Assembly.
“California took a huge leap forward last year in creating a legal and regulatory framework for the cannabis industry,” Atkins said in a statement. “The obvious next step is to make it easier — and safer — for the business owners in this industry to participate in, and help grow, our economy.”
Between continued growth of the medical cannabis industry and the addition of recreational sale next year, the state’s Legislative Analyst Office expects tax and license revenues to reach and possibly surpass $1 billion annually.
A similar effort fell short last year by virtue of being obscured by the blur of marijuana reforms, said Hezekiah Allen, executive director of the California Growers Association, a trade group that represents 700 members.
“Last year it was, ‘Oh that sucks, you guys can’t use the banks.’ Now, we have a granular understanding of what that means. It means we can’t get health insurance. It means we don’t know how to access mortgages. And it means we can’t pay our licensing fees,” Allen said. “It’s really an awareness now that just didn’t exist even four months ago.”
— Sebastian Montes
What San Diego County Wants From the State
Don’t make us do anything. Don’t make us spend more money. Give us more money.
That’d be the short version of San Diego County’s 2017 legislative agenda.
The agenda, which was adopted last month, lays out the things the county wants to support and oppose in Sacramento and at the federal level. The list of concerns and hopes goes on for more than 100 pages. Many local governments have such lists, since a simple change at the state or federal level can have profound consequences for how much control local elected officials actually have.
The plan is drawn up by county departments and the Office of Strategy and Intergovernmental Affairs and then approved by the Board of Supervisors. It’s executed in Sacramento with the help of two outside lobbying firms, JGC Government Relations and Nielsen Merksamer Parrinello Gross & Leoni.
It’s hard to discern what the biggest concern or hope is because a list of “priority issues” runs for 56 pages. County spokesman Michael Workman said that’s because there are “so many potential legislative programmatic and funding impacts” on which to focus.
The county wants more money from the state for jails and corrections, road repair, health care, prescription drug abuse treatment, fire prevention, water infrastructure projects, an earthquake early-warning system and pest control.
The county doesn’t want the state to make it bear more burden or responsibility for housing prisoners and cleaning up rivers and streams.
It wants some tweaks to the law, particularly ones that would give it more flexibility in deciding how money is spent or things are done. It wants the governor to encourage Indian tribes to put their casinos near one another to reduce the impacts of having so many different casinos in the backcountry. It opposes recreational use of marijuana. It supports the construction of new electricity plants and opposes legislation that mandates local government to reduce greenhouse gas emissions without new money for pay for that work. It opposes offshore drilling.
– Ry Rivard
Two Greats, Gone
California lost two giants this week.
Kevin Starr was the keeper of California’s history. The former state librarian and USC professor reminded us time and time again that “the California story is too wonderful, and too important, to walk away from,” Peter King writes in a wonderful tribute.
And San Diego’s Lucy Killea was a pioneer who “dedicated her professional life to creating change as a way to improve the lives of San Diego women.”
The whole country has its eyes on California as it prepares to become a major foe of President Donald Trump.
The San Francisco Chronicle has a great comprehensive feature laying out the many issues that could cause friction between the president and the Golden State, what each party wants and possible outcomes.
California Sunday, meanwhile, kicked off a series examining how the state plans to take on the president. This first story gives some remarkable details about how Senate President Pro Tempore Kevin de León, Assembly Speaker Anthony Rendon and Gov. Jerry Brown kicked into action immediately after Trump’s election.
Also this week, Sen. Kamala Harris aggressively questioned Trump’s nominee to head the Environmental Protection Agency. At issue is California’s ability to set environmental rules that go above and beyond national standards.
Scott Pruitt’s answers did not seem to favor California.
Pruitt won’t commit to keeping EPA waivers allowing Calif to impose its own, strict emissions standards.
— Evan Halper (@evanhalper) January 18, 2017
Golden State News
• San Francisco’s Ed Lee is the highest-paid big city mayor in the country, with a salary of $289,000. San Diego Mayor Kevin Faulconer makes just over $100,00 a year. (San Francisco Business Times)
• To the surprise of many, Sen. Dianne Feinstein hinted that she will indeed run for re-election in 2018. (KQED)
• Gov. Jerry Brown’s administration made a $1.9 billion accounting error last year that means a bigger deficit for the state. (AP)
• It’s raining. So is California’s drought over? VOSD’s Ry Rivard examined the different definitions of a drought.