Santa Clara County looking at eliminating medical marijuana ID fee

Santa Clara County Supervisor Dave Cortese wants to make obtaining medical marijuana products more accessible by waiving the $100 renewal fee on ID cards.

Cortese said the fee is “pretty arbitrary” and was set by the Board of Supervisors based on a recommendation from the administration when the State Senate bill that established the card system, SB 420, was passed. The board on Aug. 11 unanimously approved a report on the financial impact the decision would have on the county.

“In this case, the problem I’m trying to address is we’ve kind of created a system where it’s as if we’re putting an indirect tax on prescriptions,” Cortese said. Medical marijuana patients in the South Bay pay as much as 25% in taxes on prescribed cannabis products under state law.

A small portion of the county population actually holds medical marijuana ID cards, which are voluntary. In 2020, it was about 50, although no appointments were taken in April, May or June due to the coronavirus pandemic. In 2019, there were about 185, according to the county Department of Public Health.

“The county never really did much outreach in terms of letting people know that’s an option,” Cortese said. “It’s a disappointingly low number in the first place, which actually makes this a no-brainer for me. The county is not going to take a significant  (financial) hit on this.”

Having a medical marijuana identification card waives the 10% sales tax on cannabis products and allows holders to purchase higher potency products and more product than the one-ounce limit that recreational users are subject to.

Medical marijuana prescriptions can only be filled at dispensaries where purchases are also subject to a 15% excise tax and sometimes a city business tax.

Obtaining the card costs $100, not including the $40 it costs to obtain a cannabis prescription from an approved physician. With this structure, patients have to buy roughly $1,400 worth of cannabis to “break even” between the cost of the card and saving on sales tax.

“We shouldn’t be paying taxes on prescriptions,” said Crystal Campisi, a medical marijuana user who has been lobbying the Board of Supervisors to reduce taxes on medical marijuana for the past five years. “These are medicines and we’re paying more (in taxes) than alcohol, tobacco and gasoline.”

Campisi said the danger of overtaxing medical marijuana products is driving patients to the black market, where the products are not regulated and may not be quality tested. The more people that purchase on the black market, the less money the county gets from cannabis taxes.

“We don’t want to do that,” Campisi said of buying from the black market. “Those products aren’t tested; they’re not safe.”

Patients also are permitted to grow their own cannabis plants within limits under state law. Campisi said although many people may have turned to home-growing to escape the taxes, it’s not ideal because home-grown cannabis has to be smoked, which leads to other health problems.

In Santa Clara County, the price of the medical marijuana ID card also is a senior issue. Sean Kali-rai, a cannabis lobbyist, said he’s heard anecdotally from dispensary owners that the demographic of the cannabis market has gotten older since Proposition 64 passed in 2016, legalizing recreational cannabis use for adults.

Kali-rai said older adults often turn to cannabis as a sleep aid, and topical creams and balms also are popular for anti-inflammation and pain relief.

“Because he’s aware of senior issues, it just completely makes sense,” Kali-rai said of Cortese’s proposal. “People who are using this for medical purposes shouldn’t have costs on top of costs.”

Cortese said the measure is aimed at making medical marijuana more affordable for low-income and fixed-income adults, adding there is overlap between older adults and people on fixed incomes.

“The cost (of the ID card) is burdensome for low-income or fixed-income individuals who may be on some kind of permanent disability or some other kind of situation,” Cortese said.

Contact Stella Lorence at [email protected] or follow on Twitter @slorence3.