Two North Coast legislators’ medical pot tax bills go down to defeat

Two medical marijuana tax proposals submitted by North Coast lawmakers have failed in Sacramento, leaving California voters to decide on higher taxes incorporated in a pot legalization measure on the November ballot.

The tax rates in Proposition 64, the Adult Use of Marijuana Act, exceed the rates in the two failed bills by state Sen. Mike McGuire and Assemblyman Jim Wood, both Healdsburg Democrats whose districts include the pot-rich Emerald Triangle.

Wood, who said he was stunned by the rejection Thursday of his proposed excise tax on medical cannabis distribution, said the rate built into the legalization measure is “higher and harder on the industry than what I proposed.”

The ballot measure sets a $9.25 per ounce tax on marijuana flowers, while Wood’s bill, following some amendments, set rates of $4.75, $9.25 and $13.25 per ounce based on cultivation volume, a scale he said was intended to give smaller growers a break.

Similarly, the ballot measure sets a 15 percent sales tax on all marijuana sales, medical and non-medical, while McGuire’s bill originally stipulated 15 percent but was amended down to 10 percent on medical marijuana.

Both legislators said their bills were adjusted to treat the cannabis industry fairly, while raising millions of dollars to help state and local governments pay for the costs of law enforcement and cleaning up the environmental damage from illicit cultivation.

McGuire’s bill, the Marijuana User Fee Act, would have added a 10 percent levy to the existing state sales tax of about 8 percent on all medical marijuana purchases. Eighty percent of the proceeds would go the state, with 30 percent earmarked for both the general fund and a grant program for local agencies, and 20 percent for both state parks and local drug and alcohol treatment programs.

Wood’s bill, the Medical Cannabis Tax Law, would have included a $1.25 tax on each immature pot plant and was expected to raise nearly $80 million a year, with 90 percent earmarked for local law enforcement, environmental cleanup and a watershed enforcement team.

State budget analysts said the adult legalization measure would trim state criminal justice spending by millions of dollars and generate up to $1 billion in taxes.

“The decision is now in the hands of the voters,” McGuire said.

Wood’s bill had been approved by the Assembly, 60-12, and subsequently cleared a Senate committee in June.

On Thursday it was shelved without comment by the Senate Appropriations Committee, and Wood said Friday he still does not know why.

“I’m hugely disappointed,” he said. “This would have been a big win for the North Coast.”

McGuire’s bill won Senate approval, 27-10, on June 1, but failed on a 4-5 vote by the Assembly Revenue and Taxation Committee 19 days later.

“We faced fierce resistance from groups who did not want to see a tax on marijuana,” he said.

Medical marijuana, approved by California voters in 1996, has gone “untaxed for too long,” McGuire said.

He and Wood were major authors of the Medical Marijuana Regulation and Safety Act signed by the governor last year, establishing a regulatory and tax system effective in 2018.

California NORML director Dale Gieringer said his pro-legalization group opposed both bills on grounds it was “premature for the Legislature to get involved” given that Proposition 64 is due for a November vote.

Gieringer said he is not flatly opposed to weed taxation, but concerned about the impact on cannabis patients, some of whom “can barely afford their medicine now.”

The 650-member California Growers Association supported Wood’s bill because it had a tiered tax rate and applied to distributors who are “high up on the supply chain,” executive director Hezekiah Allen said.

The group opposed McGuire’s sales tax measure, saying it would only favor a 5 percent tax instead of 10 percent.

Allen said the “cumulative tax liability” on marijuana - counting state and local taxes - should not exceed 20 percent.

At a 25 percent tax total, the illicit pot marketplace becomes more competitive than the legal, regulated market, he said.

You can reach Staff Writer Guy Kovner at 707-521-5457 or On Twitter @guykovner.

UPDATED: Please read and follow our commenting policy:

  • This is a family newspaper, please use a kind and respectful tone.
  • No profanity, hate speech or personal attacks. No off-topic remarks.
  • No disinformation about current events.
  • We will remove any comments — or commenters — that do not follow this commenting policy.
Send a letter to the editor

Our Network

The Press Democrat
Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Sonoma County Gazette