Rhode Island Governor Wants to Tax Medical Marijuana Patients’ Plants


The governor of the the nation’s smallest state wants to raise a big chunk of revenue by taxing medical marijuana cultivation, including plants grown by individual patients for themselves.

In a Fiscal Year 2017 budget released Tuesday night, Rhode Island Gov. Gina Raimondo (D) proposes making the Ocean State the first in the nation to levy a tax on home cannabis cultivation by patients.

Starting at $150 per plant for individual patients, Raimondo recommends a new schedule of fees for different categories of cannabis cultivators in the state’s existing medical marijuana program:

o A $150 plant tag fee for patients who self-grow medical marijuana is expected to result in $1,440,000 in additional revenue.
o A $150 plant tag fee for caregivers who grow medical marijuana for Medicaid patients is expected to result in $611,902 in additional revenue.
o A $350 plant tag fee for caregivers who grow for non-Medicaid patients is expected to result in $8,253,228 in additional revenue.
o A $350 plant tag fee for co-op growers is expected to result in $399,000 in additional revenue.
o A $350 plant tag fee for growers with cultivator licenses is expected to result in $31,500 in additional revenue.

In all, the governor estimates her proposed changes to the medical marijuana program will generate an additional $8.4 million in revenue next year.

Karen O’Keefe, director of states policies for the Marijuana Policy Project (MPP), said the plant taxes would make Rhode Island’s medical marijuana program stand out from other states, but not in a good way.

“Unfortunately, several states tax medical cannabis and several do not allow home cultivation at all,” she wrote in an email to Marijuana.com. “But, I believe this proposal is unique and that no other state levies expensive per plant fees on cannabis grown by patients.”

According to Raimondo administration officials, each cannabis plant produces $17,000 worth of medical marijuana a year over three growing cycles, and so the tax amounts to no more than two percent of the total value.

But medical cannabis advocates take issue with the math.

Joanne Leppanen, executive director of the Rhode Island Patient Advocacy Coalition (RIPAC), called it “mind boggling.” 

In an email to supporters, she wrote, “If a patient is growing for their own use, how is that plant generating 17,000 dollars? It does not produce revenue. It produces MEDICINE. Some plants fail.”

In addition to being proposed as a revenue generator, the plant taxes are intended to bring greater equilibrium between the often relatively low price of marijuana provided by individual caregivers and the cost of cannabis bought from the state’s three regulated compassion centers. As part of the budget, Raimondo is proposing to decrease surcharges levied at the centers.

The plan, announced in conjunction with Raimondo’s State of the State speech, also proposes transferring licensing for compassion centers, compassion center staff, cultivators and caregivers from the Department of Health to the Department of Business Regulation, which would also sell plant tags and maintain a tag database.

Raimondo wants the state to spend $1.2 million setting up a new software system to tag and track cannabis plants.

Leppanen, of RIPAC, said the governor’s plan is “causing stress, anger and despair.”

Medical marijuana patients “are suffering from serious debilitating medical conditions. They are not a source of revenue for the state,” she wrote, pointing out that they already must pay fees in order to qualify as patients in the first place.

She argued that medical marijuana should be treated like prescription medicines, which are not taxed. “But unlike prescription medication, insurance will not cover the cost. Patients struggle to find the funds to grow or purchase medicine. Too many do not have access or do not have sufficient access.”

Raimondo is also recommending to lower the number of plants caregivers and patients can grow, but she also wants to authorize delivery services and allow patients to access all compassion centers instead of having to choose just one. She also recommends banning the use of flammable solvents for most hash oil manufacturers.

In proposing the changes, the governor’s budget document claims that a “lack of transparency and oversight in the caregiver market makes it difficult to enforce limits on how much marijuana is grown and dispensed,” saying that the revised approach “will improve patient access to medical marijuana, enhance enforcement” and raise revenue.

But O’Keefe, of MPP, said that if the state wants to raise money from marijuana, this is the wrong approach.

“If Rhode Island is interested in making revenue related to cannabis, it should tax marijuana that adults use for enjoyment rather than patients who rely on marijuana as a medicine,” she said. “It could also create many hundreds of jobs and save law enforcement resources for crimes with victims.”

The state legislature is expected to consider legislation to legalize marijuana this year. Neither Raimondo nor House Speaker Nicholas Mattiello have offered support for ending prohibition, but both have said it should at least be considered.

Some of the governor’s proposed medical marijuana changes will need approval from the legislature but she will be able to accomplish others administratively through regulations.

In the meantime, the Raimondo administration is already getting a lot of feedback from patients who are upset about the proposal.

“We’ve heard from a number of people who grow for themselves today and we are listening to their concerns,” Michael Raia, communications director for the state’s Executive Office of Health and Human Services, told Marijuana.com in an email. “We look forward to continuing our conversations with them and other stakeholders.”

This story has been updated to add comment from the Raimondo administration, clarify the governor’s value estimate for marijuana plants and add further details of her proposal.

About Author

Tom Angell covers policy and politics for Marijuana.com. Separately, he serves as chairman of the nonprofit organization Marijuana Majority, which works to ensure that elected officials and the media treat legalization as a serious, mainstream issue. Marijuana Majority led the effort to get the U.S. Conference of Mayors to pass a resolution telling the federal government to respect state marijuana laws, and orchestrated the first-ever endorsement for marijuana legalization by a U.S. Supreme Court justice (John Paul Stevens). Previously, Tom worked for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (All organizations are listed for identification purposes only.)

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