Will Proposition 64 Generate Revenue from Marijuana Tax as Planned?

Many medical cannabis patients were concerned that the ballot measure that legalized marijuana for recreational use in the state of California would make the cost of their medicine increase. However, for a number of them, marijuana just became way cheaper than before even though this may not be for long. The Board of Equalization in recent times sent notice that anyone who has both medical marijuana recommendation from a doctor and a county-issued ID card that identifies them as patients do not need to pay state sales tax following the passing of Proposition 64. The measure was passed with a 56% vote during the 2016 elections and as a result, marijuana became legal for recreational users in California. The proposition also created a new licensing and tax requirement for all weed businesses operating round the state. Most experts did not expect any of the tax provisions for this bill to kick in for yet another year following an already imposed 15% excise tax slated to be effected during implementation. Therefore, while medical cannabis patients are celebrating an early break in taxes, some state officials are crying foul over the unexpected loss of money following a reduced tax revenue collection in the coming year. Current, the Board of equalization and those who authored Proposition 64 are on the run to find a quick solution.

Differences in the interpretation of Proposition 64 were highlighted as the source of the conflict. According to the measure, all marijuana sales both medical and recreational will include an excise fee of 15% from the start of January 2018. However, this initiative exempts medical cannabis patients in possession of county ID cards from the regular retail sale tax that ranges between 7.5 to 10% in all cities within California. The objective by the Yes on Proposition 64 authors, according to their attorney, was to make sure that weed remained affordable for patients though not exceedingly cheap so that recreational users would be motivated to fake ailments to help them avoid the taxes on recreational marijuana. The office of the independent Legislative Analyst made estimations on tax revenue following the passing of 64 and found that it could hit an additional $1 billion on an annual basis. The only issue is that, Proposition 64 did not give specifications of when the reduction on sales tax for cannabis patients would start.

The members of the State Board of Equalization, a number of whom opposed Proposition 64 openly made a ruling that based with the individual rights granted through the measure, the tax exemption for medical cannabis patients came into effect on November 9, 2016. This was because, according to the constitution of California, all provisions of any ballot measure should take effect at the midnight of the day of election unless the initiative particularly says otherwise. Those who drafted Proposition 64 referred to this interpretation as absurd. They vehemently fell out with any interpretation of this measure concluding that medical weed patients are in a way exempted from paying state use and sales tax immediately prior to the implementation of the excise tax.

If there is any question over the way in which the ballot measure must be implemented, the courts were expected to do so in a manner that was consistent with the intent of the voters. These sentiments were expressed through the supporters on Yes on Proposition 64 campaign. Based on this, it is evident that the purpose of Proposition 64 was both for tax measures to take effect simultaneously, with a clearly stated objective of generating millions of dollars in new state revenue on an annual basis. However, this oversight might cost the state millions of dollars on tax revenue.


Barry here and I live in Hollywood. Yup, that’s right, I live in the city that’s home to the stars of the silver screen and walk along Rodeo Drive that could be paved in gold with the obscene amounts of money spent in its shops. I’m a writer. Well actually I’m a frustrated author of a book yet to be published about a subject that still eludes me. In the meantime I write blogs for websites to earn my crust and particularly enjoy writing about marijuana, particularly about the medical breakthroughs that are benefitting untold numbers of people worldwide.

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