West Virginia Gov. Jim Justice is considering a bill to eliminate taxes on medical cannabis growers, processors, and dispensers, instead opting to only levy a 10 percent tax at the point-of-sale, according to a WOWK report. The proposal also allows vertical integration in the space and advocates fear the changes in the bill will delay the roll-out of the program by another year or two.
The medical cannabis legislation is one of 14 the Republican governor vetoed over so-called technical problems. The bills are forcing the legislature to convene a special session next month.
The original medical cannabis law signed by Justice in 2017 taxed both growers and processors with a 10 percent tax and another 5 percent for dispensaries. It also barred companies from owning a cultivation, processing, and dispensing company in the space – known as vertical integration. Justice vetoed a bill in March which would have allowed vertical integration but included taxes at all levels of the supply chain – meaning one vertically integrated company would pay three different taxes.
“While the Legislature has authority to classify different businesses and tax them differently, the classifications must be 1. reasonable, 2. based on pertinent and real differences, and 3. have as their object a purpose that is germane to the enabling legislation.” – Justice, in his veto message, via the Register-Herald.
Michael Haid, a medical cannabis lobbyist, told WOWK that “stand-alone dispensaries won’t have a chance” in the state without vertical integration and officials want to make sure there is enough money to self-sustain the program.
Sales were expected to begin July 1, but the state has yet to issue any licenses. The bill vetoed by Justice last month included provisions for regional distribution which would have helped move the program along. Officials hope a recently-passed law setting up a bank for the industry will help get medical cannabis businesses licensed.
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