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Depending on which state you live, your purchases of medical cannabis may be subject to tax. While many states like Colorado, Washington and Michigan outline taxes on the medicine, is this tax on medicine constitutional?

Most States forbid taxes to be levied against prescription drugs or agricultural products. Since marijuana is a schedule 1 drug it cannot be prescribed and technically, not a prescription drug. Despite our US Supreme court labelling cannabis a food, it is still not considered an agricultural product by those states who tax its use.

In Michigan, the marijuana rulemaking agency just declared that even medical marijuana sales outside of a dispensary are taxable. Cannabis patients need to self-report their purchases from their provider to the government.

This self-reporting could also be used to inform the Federal Government that you are breaking the law. “Here is how much pot I purchased this year, Uncle Sam.”

In Colorado medical marijuana is subject to the 2.9% state sales tax and any local sales taxes.

Every state with a medical cannabis law clearly states through statute that marijuana has medical value. In every state, a licensed doctor needs to meet you, sign a recommendation (not a prescription) and when purchasing cannabis your card issued by the state (still not a prescription) is used to verify that you are able to use cannabis. If you are still confused why a medical marijuana card is not a prescription, don’t worry, I am too.

With the flow of tax money from marijuana prescriptions into state coffers, states may be the biggest opponent to the federal deregulation of marijuana.

 

Dan Drevin
Dan Drevin
Patient advocate and I also run a financial services advisory firm in Metro Detroit.

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