California’s New Cannabis Laws Squeeze Out Compassionate Care Programs

Photo Credit: David Trawin

January’s been an eventful month in California. New Year’s Day saw the implementation of the long-awaited Medicinal And Adult-Use Cannabis Regulatory Safety Act (MAUCRSA), allowing Californians over the age of 21 to legally buy pot for recreational use. But a sense of chaos looms over the nascent industry. The onset of these complex rules has hurled businesses into a world of growing pains, and it’s also taking a toll on medical marijuana patients — the people the cannabis legalization movement was originally built on.

Steve Stevens uses cannabis to treat symptoms of AIDS and colon cancer. Living on Social Security in San Francisco, one of the most expensive cities in the world, makes purchasing $70-$80 eighths or $400-$600 ounces of flower (or its oil equivalent) nearly impossible. But thanks to Sweetleaf Collective, a 150-patient compassionate care non-profit that donates flower to low-income, terminally ill patients, Stevens has medicated daily for the last decade.

“I use cannabis every day to treat a number of things,” says Stevens. “I was officially diagnosed with HIV back in 1984 and then AIDS 15 years ago, and I’ve been on the cocktail ever since. I resisted taking the meds at first because the early ones were not only killing AIDS, but they were also killing people and destroying their livers. So I waited until I really needed them.”

At first, Stevens’ pharmaceutical regimen required him to take a handful of pills every day that made him nauseous and obliterated his appetite. The cannabis, he says, not only helped curb nausea and boost hunger, it also alleviated the psychological and emotional heaviness that came with his condition.

Under California’s legalization legislation, however, cannabis businesses are required to pay taxes on all products, including donations and samples. There’s no way to dodge it: the law has implemented a track-and-trace system designed to follow all flower and cannabis products through the supply chain from cultivation to sale. Every step of the supply chain has its own tax requirements, too. So if a business doesn’t pay taxes on products, the Bureau of Cannabis Control will know.

This area of the law drastically impacts Sweetleaf because it’s a donation-based business—a model that mirrors the culture of Proposition 215, the law which ultimately granted patients the legal right to procure and use medical marijuana with a doctor’s recommendation. According to Joe Airone, who founded Sweetleaf in ‘96, the collective delivered over 100 lbs of cannabis (flower and shake that was donated to Airone from cultivators in Humboldt County) to 150 patients last year. Under current law, Airone would have to pay over $50,000 in taxes on 100 lbs cannabis he’s not making any return on. As a result, Sweetleaf has been forced to halt business, leaving 150 severely ill, low-income patients without cannabis.

“People are going to die because of this,” says Airone. “It keeps me up at night and it’s the first thing I think about when I wake up in the morning. This compassion program is saving so many sick people’s lives. Sometimes when we make deliveries, the patient cries and says, ‘I would be dead already if it wasn’t for you.’ These patients need Sweetleaf. I truly didn’t see this happening with legalization.”

The origins of modern cannabis culture, Airone contends, are rooted in compassion. California’s Prop. 215, or the Compassionate Use Act, passed on Nov. 5, 1996, making the Golden State the first in the country to legalize medical marijuana. It ensured that seriously ill Californians had the right to obtain and use marijuana for medical purposes in the treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraines and/or any other illness for which cannabis provides relief.

Prop. 215 was spearheaded and co-authored by Dennis Peron, a gay rights and cannabis activist from San Francisco who couldn’t stand that severely sick people were being criminalized for using cannabis. Two weeks ago, Airone met with Peron to discuss the problems MAUCRSA caused for compassion programs, like Sweetleaf. Peron, known as the “father of medical marijuana,” expressed full support for Airone and his drive to fight for compassion in this new legal landscape. “One of the great rewards of getting old is seeing the new warriors come along and keep the compassion alive,” Peron said in a statement to Airone a few weeks ago. “Thank you Sweetleaf Collective for caring for so many patients who have no other access to medicine.”

The compassion movement suffered a heartbreaking loss over the weekend, though. Perone died on Saturday in a San Francisco hospital at 72. But his words and passion still echo through the cannabis community. In an interview with the Eureka Times Standard in 2016, Peron said he thought MAUCRSA was “the government’s way of extorting people and turning the marijuana industry into a profit-based culture for big business…”

But Airone doesn’t believe that compassion programs and patients are being targeted on purpose. Rather, he thinks it’s an unintended consequence; a result of never having regulated cannabis before. That said, he’s confident the MAUCRSA is shutting down compassion programs all over the state; meaning tons of low-income, terminally ill people are without access to medicine. Airone has thus spearheaded a compassion program coalition whose mission is to educate the public about what the new law is doing to donation-based businesses and the patients it’s affecting. They have a petition calling for change here. “One thing that’s come out this is that a bunch of different compassion programs are coming out of the woodwork,” Airone says. “Most of us really didn’t know about each other and now we’re starting to work collectively in our different municipalities to try and get local ordinances changed to protect compassion.”

Caladrius Network, East Bay Cares, Wo/Men’s Alliance for Medical Marijuana (WAMM), Operation Evac, the Weed For Warriors Project (WFWP) Oakland chapter, and WFWP national branch are the donation-based groups in California who’re in the coalition with Sweetleaf because they’re facing the same problem: halting business because no one can pay taxes on product they’re not making money on. But they’ve made a lot of headway in regards to gaining public support. They’re also laying the proper foundation by chipping away at local municipalities to change city ordinances– a step that must happen before Lori Ajax and the Bureau of Cannabis Control change the law at the state level.

After serving in Panama, Sean Kiernan worked on Wall Street prior to becoming the president of WFWP– a donation based business that provides cannabis to veterans who suffer from PTSD, severe physical disabilities and other war-related issues. He says he saw this exact problem with MAUCRSA coming down the pipeline as far back as 2016. Kiernan contends that California has a tax revenue motive, which is enforced by tracking all cannabis products from seed to sale. “We’ve been screaming about this problem since before [the new law] was voted on,” Kiernan says. “The cost of operating a business drastically goes up under the MAUCRSA, and thanks to the track-and-trace-system no one can donate or give any product away without paying taxes. We’ve had to change [WFWP’s] model as a result.”

Before legalization in California, WFWP received pounds of donated cannabis and products because cultivators didn’t have to pay taxes. Now, taxes are tacked on at every level of the cannabis supply chain. Thus, Kiernan and his group are looking for ways to get funded so they can create a more formalized foundation that gives veterans a voice, supplies them with meds and, most importantly, gives them a community.

But Sweetleaf’s 150-patient operation has a different dynamic than WFWP. “Some people have suggested to us that we just do some fundraising,” says Airone. “But with the type of money needed to do our job the way we’ve been doing it, we’d need to raise enough to buy a condo in the Bay Area.”

Jeff Sheehy, a member of San Francisco’s Board of Supervisors who uses cannabis to treat his HIV-related symptoms and who also co-authored the city’s adult-use regulations, acknowledged the fact this area of the law needs to be rectified. As a result, he recently amended San Francisco’s regulations to incorporate language to protect compassion programs and exempt them from taxes.

“This is becoming a compassion movement,” says Airone. “It’s amazing that Sheehy has made amendments to the local ordinance. It just goes to show how receptive people are to this. The people of California want these protections for compassion programs, and it’s not fair that taxes have shut us out. Prohibition has now been placed on the people who need this medicine the most.”

With the death of Peron and the wellbeing of thousands of critically sick medical marijuana patients at stake, Airone says he’ll stop at nothing to ensure compassion programs are preserved. “We will make this happen for [Peron] and carry on his legacy,” says Airone. “This is about coming together for the sake of people’s lives and bringing the focus back to compassion.”