California Just Passed a Slew of Groundbreaking Weed Reform Laws
The world’s largest cannabis market will let medical marijuana patients receive free cannabis, permit cannabis businesses to make deductions on their state taxes, and more.
Published on October 15, 2019

Good news, Californians: The Golden State just made life a lot easier if you’re a cannabis patient, retail consumer, or business owner. But if you're a cannabis patient in a hospital, you still won't be able to use your 420 meds, unfortunately.

On Saturday, Governor Gavin Newsom signed three key cannabis bills into law. The most revolutionary of the three is SB 34, which lets dispensaries give medical marijuana to qualifying low-income patients for free. Yeah, you read that right: By law, California can now dispense free weed to those who are most in need. The weed donated through this program is exempt from all state taxes, too.

Speaking of taxes, Gov. Newsom also signed AB 37 on Saturday. AB 37 allows the state’s licensed cannabis businesses to finally make standard deductions on their state income tax returns. Under federal tax code 280E, no business selling a Schedule I drug like marijuana can make standard business deductions, which has forced the weed industry to pay far more in taxes than any other industry. With AB 37, California joins other weed-legal states such as Colorado, which also permits weed companies to make state income tax deductions.

In 2017, the federal government made $4.7 billion off income taxes collected from state-licensed cannabis companies, even though it considers weed to be more dangerous than cocaine.

The third bill that became law, SB 153, formally establishes California’s hemp program in accordance with the 2018 Farm Bill. In late 2018, President Trump signed the Farm Bill, which federally legalized hemp and removed it from drug scheduling. However, since individual US states crafted their own anti-hemp laws in the past, each state must revise its current regulations to allow hemp cultivation, processing, and sales. Hemp is basically weed without THC, the compound that gets people intoxicated, and it’s currently America’s fastest-growing cash crop by acreage.

Gallery — Legalization Rally Signs:

Despite the progress made on Saturday, Gov. Newsom did “begrudgingly” veto one key bill: SB 305. This Senate Bill would have allowed terminally ill patients to access medical marijuana while staying at state hospitals. Earlier versions of the bill would’ve allowed non-terminally ill patients to access medical marijuana in health facilities, but the language was later tightened to only permit access for terminally ill patients.

“This bill would create significant conflicts between federal and state laws that cannot be taken lightly,” the governor wrote in a press release. He argued that allowing weed at federally regulated health care facilities could cause them to lose much-needed federal funds, such as those provided by Medicare and Medicaid programs. 

However, some hospitals, such as those in Colorado, will allow certain patients to use medical marijuana on site, so long as the medicines aren’t administered by hospital staff. Smoking or vaporizing cannabis is not allowed at participating hospitals, either. Regardless, no hospitals in Colorado have been stripped of federal funding to date.

While Gov. Newsom’s argument for vetoing SB 305 addresses some real concerns, citing the conflict between federal and state laws seems a little ridiculous for a state that’s raking in millions of dollars in tax revenue from regulated weed sales. Technically, due to the disagreement between federal and state marijuana laws, one could argue that every state that’s collecting weed taxes is committing money laundering at the federal level. So, why not just let the hospital patients have their weed?

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Randy Robinson
Based in Denver, Randy studied cannabinoid science while getting a degree in molecular biology at the University of Colorado. When not writing about cannabis, science, politics, or LGBT issues, they can be found exploring nature somewhere in the Rocky Mountains. Catch Randy on Twitter and Instagram @randieseljay
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