The best strategy to stop paying cannabis taxes in 2019

The passing of Prop 64 ushered in “recreational” cannabis to the State of California. With that brought new laws, copious amounts of regulatory commissions, still no banking solutions, and most important of all...TAXES!

Yes, I said it. Taxes. But do any of us really know what that means? Do any of us know what that means for our pocket books? I doubt it.

Well, I think it’s time we talk about the elephant in the room. 2018 has come and gone and we all need to understand how much taxes we are  paying. By the time you’re done reading this you will understand what taxes you’re paying, who’s paying them, and how to avoid them. So let’s do it. Here goes your crash course in Cannabis Taxes 101.

Tax Breakdown

There are three types of taxes you need to know about:

1. Excise Tax- This tax is imposed by the State of California and paid to the state at the rate of 15%. That rate is fixed and applies to all purchases of cannabis in California.

 

1. City Tax- This tax is imposed by your city and paid to your city. The percentage is set by your city and will vary depending on what city you are located in. It can also be different rates for medical vs. recreational within one city. For example, the City of Oakland has set their cannabis tax at 5% if your medical and 10% if your recreational.

 

1. Sales Tax- This tax is not hard to understand. We all know about sales tax.

It’s important to remember that some cities aren’t charging a city tax as high as the City of Oakland California and others none at all. So the amount of taxes you are paying can vary depending on what city you are in.

Who’s Paying These Taxes?

Well the answer is EVERYONE! 

Even if you have a medical card, you ask?

YES, even if you have a medical card. (Frowny face) 

Surprised? I totally get it. And chances are that if you voted “yes” on Prop 64, this isn’t what you had in mind. Unfortunately, under the proposition the state fully disclosed this 15% excise tax and that (medical card or not) all cannabis sales within the State of California would be subject to it. 

Now, everything that glitters is not gold and they definitely dangled that carrot that made the majority of Californians overlook the fine print. 

There’s no going back. 

The regulations are here.

You might be thinking, “Is there any relief to be had from these excessive cannabis taxes?”

Well, there is! But it’s going to take some effort.

Want to avoid paying all these cannabis taxes?

So...you can’t escape all cannabis taxes but you can dodge sales tax. You must first have a medical marijuana card and then you’re eligible to acquire a MMIC (Medical marijuana Identification Card) from your local Department of Public Health. 

What is an MMIC?

A Medical Marijuana Identification Card is a state-issued license that allows you to buy cannabis without paying sales and use tax.

How do I get a MMIC?

You not only need your doctor’s medical marijuana recommendation, but also:

1. An appointment with your local county public health department. Locate your county’s public health office here.
2. $100 cash. No credit cards, debit cards, or checks.
3. Proof of residence (photo ID with current address, recent utility bill, rental payment receipt).
4. Valid government ID (driver’s license, California State ID Card, or passport).
5. For a $50 discount, bring proof of Medi-Cal or county health assistance, if necessary (bring your Medi-Cal card).

Your MMIC will arrive by mail. Once it does, access your profile on ProperRx.com by going to the menu and logging into your account. Once logged in, upload a picture of your MMIC and Proper Rx will verify your MMIC with the state and you will be exempt from sales tax on purchases until your MMIC expires.

Is it worth it? Are you getting one? Let us know. Comment below.