Legal Pot Means Temporary Tax Break For Some Medicinal Marijuana Users

LOS ANGELES (AP) - Some California medical marijuana users are getting a tax break.

State officials announced Thursday that certain purchases of medical cannabis are now exempt from sales taxes, under the law approved by voters this month that legalized recreational pot in California.

Under the new law known as Proposition 64, a 15 percent excise tax will be imposed in January 2018 upon purchasers of all marijuana and marijuana products, including medical cannabis. A tax on cultivators will also be imposed.

Until then, the tax holiday goes to people who make purchases with a medical marijuana identification card from the California Department of Public Health.

That's a relatively small group in a state of 39 million people. According to government data, California issued about 6,700 of the identification cards in the year than ended in June. However, that number doesn't capture the entire universe of cardholders. The state has issued 2,200 cards since that time, but many could be renewals.

The tax-collecting Board of Equalization said in a statement that buyers with a paper recommendation from a physician do not qualify for the tax break.

The financial hit on the state was not immediately clear.

Medical dispensaries currently pay 7.5 percent in state sales tax on sales, and local taxes typically add 1 percent to 2 percent.