Insight into California’s Recent Nonprofit Tax Reformation

california cannabis

California legalized the use of cannabis for people. It began to tax it. Some people who used it for medical purposes found that now they could not afford it. Bloomberg Tax had Joe Airone from Sweetleaf explain how recent legislation has made medical cannabis available again to low-income patients.

California recently passed a new law that will help the homeless and low-income people. The law says that it is not illegal to give away marijuana if you have less than an ounce of it.

California’s tax shift was eagerly awaited by compassionate members of the nonprofit cannabis networks. The names Dennis Peron and Brownie Mary should sound familiar to Californians—S.B. 34 was named for these two pioneers who helped author Proposition 215.

The Sweetleaf Collective has pursued the right of patients to utilize medical cannabis for decades. The nonprofit collective initially began serving HIV/AIDS patients in 1996 under the Compassionate Use Act, and later expanded its care to low-income people of various ages, who have disabilities or are terminally ill.

The Compassionate Use Act was a revolutionary law that allowed cannabis growers and distributors to donate a portion of their crop to intermediary nonprofits such as Sweetleaf, which then pushes the product to low-income patients in need.

One glaring shortfall of California’s Proposition 64 was the imposition of a large tax on sales to create a legal market for adult-use marijuana.

A loophole in California’s marijuana regulations turned cannabis nonprofits upside-down financially. This stemmed from the state’s legal recreational cannabis sector.

When California legalized recreational cannabis, the tax rate applied to commercial and non-commercial products was lower than on any product that left a shop.  This meant that charities (or those donating legally) were donating their product if they wanted it to go unnoticed.

Previously, marginalized patients had difficulty finding access to affordable medicine. This is because there were convoluted nonprofit taxes on cannabis that made it complicated and expensive for many patients to obtain the treatment they needed.

Currently, there are not enough health insurance options that offer help with covering the cost of medical cannabis treatments, which is a huge issue because without these treatments many poorer patients.

Sweetleaf must reduce service to patients by 25-33% due in part to the increased taxes on donations which limit funding and efforts to construct a new, state-approved supply chain. The change has incurred more costs and caused aid output to be further reduced.

Sweetleaf, the American cannabis company with a philanthropic bent, was pleased to see S.B. 34 signed into legislation in 2019 so that compassionate care organizations can function again as nonprofits and regain their original control of supply chains in California without interference from state taxes and regulations. The increased transparency ensured by the CalCannabis system has also enabled.

These gains are significant, but always room for improvement, especially in the cannabis space.

Nonprofit compassion programs are unable to directly work with the production or delivery end of the supply chain in California. This is because no license option currently exists. Thus, these organizations have to devote their time and resources towards networking with potential partners before they can get off the ground.

The nonprofit sector is one of the most compassionate and altruistic groups in society. Yet, there are two major obstacles that every new or established organization must overcome: awareness and fundraising.

Awareness can only be accomplished through a well-crafted marketing campaign to get your message out into potential donors’ consciousnesses. However, when organizations have both an understanding audience and abundant monetary resources, they finally hit on something truly special; getting funding becomes easy thanks to generous donations from newfound supporters all around the world!

Cannabis has been rapidly accepted by the public as a medicine and for recreation. However, it is often overlooked that this industry also contains many nonprofits who are using cannabis to heal people in need. Groups such as these are making an impact on society, yet not well-known outside of circles with similar interests

While the marijuana sector at large has become popular in mainstream America, the nonprofit side’s existence is oftentimes overshadowed or unknown altogether due to its being hidden behind multimillion-dollar corporations looking solely for profit. The compassionate cannabis care arena holds a larger meaning than just simply selling weed: those invested find comfort knowing they’re providing therapeutic relief through their work which benefits droves of patients struggling every day.

Louis Levey is the Content Success Manager and Founder at No Strings Content. He's passionate about helping cannabis businesses use content to attract, educate, and convert audiences. His hometown is Boca Raton, Florida, but he currently lives and works remotely in Chiang Mai, Thailand.

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