What are the savings with a medical card in California? If you're trying to decide if a medical marijuana card is worth it for you, check some of this helpful information
At the time of writing, 15 states plus Washington, D.C. have legalized cannabis for adult consumption. Twenty more states have enacted legislation establishing medicinal marijuana programs. If you consume cannabis in one of those states without a medical marijuana card, you are violating the law. However, in states that allow recreational marijuana, you may often go into a dispensary and purchase up to an ounce.
In most places that allow recreational marijuana, you may go into a dispensary and purchase up to an ounce.
As long as you are at least 21 years old and have a valid photo identification, you should have no problems. Therefore, if you reside in a state such as California, where adult-use cannabis is legal, why bother with the MMJ application process?
There are many reasons why investing in a medicinal marijuana card in an adult-use state is advantageous. To begin with, you save money, but there are many other benefits. We will examine each of them in detail in this post.
Please keep in mind that many adult-use states do not yet have an operational recreational sales program. As a result, it remains unlawful in New Jersey, for example, to consume cannabis without an MMJ card. Check your state's legislation to guarantee you have the most up-to-date information.
Exemption from Tax
While the conditions vary by state, the majority of MMJ cardholders may anticipate paying considerably less tax. As you will learn below, a few states have very high cannabis tax rates.
By contrast, holders of MMJ cards avoid paying the 'sales and use' tax on marijuana bought from a medical marijuana shop. This also applies to cannabis concentrates, edibles, and topical goods purchases.
Present your Medical Marijuana Identification Card to avoid paying this tax on cannabis (MMIC). Otherwise, you must pay an additional 7.25 percent, and often more.
Confusion Over Taxation in the Golden State
For Americans, understanding taxes in several countries is a daily issue. As a result, it's unsurprising that marijuana taxation is similarly perplexing. California is one of the states with the highest cannabis taxes.
According to Proposition 64, purchasers must pay an excise tax in addition to state and municipal sales and use taxes. MMJ cardholders typically pay at least a 20% tax. Recreational users, on the other hand, spend more than twice that price. Even worse, California's tax rate will rise in 2020.
The following are the three distinct fees that California citizens must pay:
- Sales and use tax: This is a state tax that may reach 10% in certain areas. This is because some jurisdictions impose overlapping 'district' fees. It is based on the sum of the excise duty and the retail price. Fortunately, you do not have to pay them as an MMJ cardholder.
- Excise tax: This is another kind of state tax, but this one is tied to the wholesale price. It typically costs 15% of the retail price and is a necessary expense.
- Local taxation: Additionally, cities and counties in California levy a 10% to 15% sales tax on merchants. As a customer, you will pay approximately 5%, sadly even MMJ cardholders will be required to pay.
Recreational users in the state of Colorado are required to pay the following:
- Sales tax imposed by the state
- Taxes on local sales
- An additional 15% state marijuana sales tax
- However, if you hold an MMJ card, you are exempt from paying sales tax.
- Every state that permits recreational and medical marijuana has a similar narrative. If you apply for an MMJ card, you will usually (but not always) pay less tax. The exact amount you'll save varies by state.
How Much Can an MMJ Card Save Me?
The following is a brief overview of the different taxes levied in states that permit recreational and medical marijuana use.
Alaska
The state does not have a statewide sales tax. You must pay $50 per ounce of bud if you are a grower. When selling to merchants or dispensaries, the price is $15 per trimmed ounce. As a consequence, rather than a sales tax, this expense is passed on to customers. Given that cannabis costs about $300 per ounce, this is essentially a 20% tax rate.
The application fee is $25, and the renewal fee is $20. The average cost of a doctor's visit is between $200 and $250. An MMJ card costs, on average, $225. Due to the absence of a sales tax, it is debatable whether you should get an MMJ card in Alaska only for the purpose of saving money. There are other advantages. However, the distinction between medical and recreational users continues to narrow.
California
We have previously highlighted the Golden State's tax conundrum. Additionally, cultivators of the following products are subject to a product tax:
- $2.87 for a single ounce of leaves
- $9.65 for a single ounce of flowers
- Fresh marijuana plant material costs $1.35 per ounce.
- Adult-use cannabis consumers in California bear a slew of expenses. There is a 15% excise tax, a municipal tax, an 8-10% state tax, a 5-15% cannabis company tax, and a cultivation tax. As an MMJ cardholder, you are exempt from state sales taxes. However, you must pay the 15% excise tax, and local governments may impose a sales tax on MMJ.
A doctor's visit may cost up to $150, and the application process can cost up to $100. Marijuana costs, on average, about $250. Californians would need to use at least four ounces of marijuana each year to justify the expense of the MMJ card in California.
Colorado
MMJ cards in Colorado are subject to a 2.9 percent state sales tax. You do not have to pay it if you purchase recreational marijuana. Retail cannabis and cannabis-infused goods, on the other hand, are subject to a 15% retail marijuana tax. This fee is included in the final price. Additionally, there is a 15% excise tax, which MMJ is free.
Additionally, you must pay local sales taxes, which vary by jurisdiction. In Denver, for instance, all medicinal marijuana products are subject to a 4.31 percent general sales tax. There is also the minor issue of a 5.5 percent special sales tax. As a result, you may multiply 9.81 percent by the remaining 2.9 percent to get 12.71 percent. However, you must add an additional 30% for recreational users, bringing the total to an astounding 42.71 percent!
In Colorado, you can get high-quality marijuana for as little as $240 per ounce. A doctor's visit, renewal, and application all cost well over $200. However, you generally won't get a financial advantage from more than six ounces each year. If you use at least that much, it's definitely worthwhile to apply for a medical marijuana card in Colorado.
Illinois
On January 1, 2020, Illinois became the first state to legalize cannabis for adult use. However, it took many months for the first recreational dispensaries to obtain permits. Residents will pay 10% for goods containing less than 35% THC. Cannabis that exceeds this quantity is subject to a 25% tax. Marijuana-infused products having a THC content of more than 35% are subject to a 20% tax.
Certain towns have the authority to levy a 3% tax on cannabis dealers. County boards of commissioners have the authority to impose a 3.75 percent tax on sales in unincorporated regions. MMJ growers are subject to a 7% privilege tax, while consumers are subject to a 1% pharmaceutical sales tax.
MMJ patients may pay up to 34.75 percent less tax in total! A one-year card costs $100, a two-year card costs $200, and a three-year card costs $250. Additionally, you must pay the standard consultation fee of $200+. However, the substantial tax savings make registering for an MMJ card in Illinois worthwhile, even as the recreational market expands.
Maine
The state legislature has voted to levy a 10% excise tax on cannabis retail sales. MMJ is subject to a 5.5 percent sales tax, whereas edibles are subject to an 8% 'prepared food rate'! Cannabis growers in Maine are subject to the following excise taxes, which are almost certainly passed on to consumers:
- 95 cents per pound for trim
- $335 per pound of mature or flowering plants
- 150 dollars for each immature seedling or plant
- $0.30 for each seed
- In Maine, the application cost for an MMJ card is $100. A doctor's visit may cost up to $300! With the high average cost of an MMJ card, the citizens of Maine would need to purchase 16 ounces of marijuana each year to cover the expense. That equates to about one-eighth of every three days!
Massachusetts
The first ballot proposal included a 3.75 percent excise tax, but it was raised to 10.75 percent in 2017. Users pay about 20% in taxes in total, but medical patients are exempt from the 6.25 percent sales tax.
Nonetheless, the application and renewal fees are $50 each, and a doctor's visit may cost up to $200. In the state, cannabis may cost up to $340 per ounce. As a result, if you buy more than five ounces of marijuana per year as an MMJ cardholder in Massachusetts, you will begin saving money on taxes.
Michigan
Michigan started recreational sales in December 2019. Adult-use customers and MMJ cardholders are both subject to a 6% sales tax, while recreational users will get a 10% excise tax.
The Michigan Registry's patient charge is $40, and an average consultation costs about $200. The renewal of your card is likewise $150, but it is good for two years. While you will pay less tax, you will need to use a considerable quantity of cannabis in order to save money with an MMJ card.
Nevada
All users are required to pay a 15% excise tax on wholesale sales. There is no decrease if you possess a medical marijuana card. You must also pay a 6.85 percent – 10% sales tax. Medical cannabis, on the other hand, is now exempt from the 10% retail excise tax.
In Nevada, you must pay $50 for a one-year card or $100 for a two-year card. A doctor's visit may cost up to $200. With an MMJ card, you may save a little money on taxes. Nonetheless, a significant amount of cannabis must be used to justify the application expenses. Nevada dispensaries have reciprocity with other states, which means that if you live in another state, you may get a card from that state.
Oregon
Cannabis consumers pay a total of 17% in retail taxes, with some towns and counties able to add an additional 3%. Holders of MMJ cards are free from these levies. Having said that, marijuana costs an average of $210 per ounce.
The application fee for an MMJ card in Oregon is $200, one of the highest in the nation. You may also pay an additional $200 for a consultation. Even with the tax reductions, you'll need to purchase a large quantity of cannabis to justify the expense.
Vermont
While recreational usage of marijuana is legal, it is still unlawful to sell it recreationally. Residents in Vermont will likely have to wait until 2022 to purchase cannabis without an MMJ card.
Washington
This state has the highest tax rate of 37%, down from 75% before. Additionally, there is a 7-10.4 percent sales tax and the opportunity to add municipal sales taxes. MMJ cards are subject to a 6.5 percent state sales tax. The card is free to apply for and renew, but a doctor's visit may cost up to $200.
In all, you would need to buy at least 12 ounces of marijuana each year to justify a Washington MMJ card. However, hold on! You are only permitted to cultivate marijuana plants if you possess a valid medical marijuana card. You may carry three ounces rather than the one-ounce allowed for recreational users. Once you've figured out how to develop it, your card may save you hundreds of dollars each year.
Washington, District of Columbia
While marijuana is legal to consume in Washington, D.C., it is not permitted to be sold recreationally. You may, however, own and develop it. Additionally, some sellers offer cannabis to consumers as a 'present' after they purchase another product. However, the District intends to take a strong line against this behavior.
New States for Recreational Activities
Residents of four more states will vote on recreational cannabis in November 2020. MMJ programs are already in place in New Jersey, Arizona, and Montana. South Dakota voters, on the other hand, approved both medicinal and adult-use cannabis. None of the states have begun implementing their own programs. South Dakota intends to begin selling recreational marijuana in April 2022. Other states may benefit from a more expedited adoption process since they already have MMJ programs in place.
While nothing is certain, the following is how each state plans to tax recreational marijuana:
- Retail sales in Arizona will be subject to the state's and local governments' existing transaction privilege tax. Additionally, the state wants to impose a 16 percent excise tax.
- Montana wants to impose a 20% excise tax.
- New Jersey: Retail sales will be subject to the state's 6.625 percent sales tax, and municipalities may impose an additional 2% local tax.
- South Dakota: It seems probable that South Dakota will impose a 15% excise tax in addition to any MMJ taxes enacted. After November 3, 2024, the Legislature may change the rate.
- Final Thoughts on Savings on Medical Marijuana
- There is no such thing as a 'discount' on medicinal marijuana. However, some dispensaries make it more affordable for medicinal patients to buy them. When you show an MMJ card in most places where it is legal to purchase it medically or recreationally, you pay less tax.
When you show an MMJ card in most places where it is legal to purchase it medically or recreationally, you pay less tax.
As you can see from the overview, the amount of money you save is location-dependent. Nevada citizens, for example, save a little money. By comparison, Maine cannabis consumers may save up to a pound of the drug each year. Residents of Alaska and California benefit the most since they just need to purchase a few ounces each year to begin saving.
The consumption rate is critical when it comes to conserving money. This is because application, renewal, and doctor's costs must be paid. MMJ cardholders do have additional advantages, such as the capacity to produce or own more.
Please keep in mind that all figures and prices in this article are subject to change based on supply and demand, as well as state and local regulations.
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