Alibi V.29 No.12 • March 19-25, 2020 

Baked Goods

Coronavirus and Weed

Will COVID-19 affect cannabis supply?

Baked Goods logo (with correct glasses!)

As madness grips Albuquerque, and toilet paper becomes worth its weight in gold, cannabis patients should at least be able to take some of the edge off with a calm puff taken at home—sealed away from exotic illnesses and toxic panic. But, apparently, even that sacred ritual could be soiled by medication hoarding in response to outbreaks of COVID-19.

According to statements made by some of the state's licensed cannabis producers, a shortage is possible if patients begin stockpiling marijuana. Ultra Health President Duke Rodriguez told the Santa Fe Reporter that if every cannabis patient in New Mexico were to buy a month's worth of meds, the state could face a serious shortage. He said increased sales in February could indicate that patients are stockpiling cannabis. As he pointed out, the Centers for Disease Control and Prevention recommends that people in danger of being exposed to the new novel coronavirus should obtain enough “extra necessary medications” to last a “prolonged period of time.”

But many dispensaries are already taking extra sanitation precautions, and some are even offering curbside assistance to patients who are worried about being exposed to (or exposing others to) the novel coronavirus. When it comes to actual cannabis flower, there is no indication of an impending shortage in New Mexico on the immediate horizon. As far as supply goes, it should be business as usual, as long as everybody maintains their composure and refrains from irrationally buying a month's worth of marijuana. And, if there were a threat to supplies, it would only take around six to eight weeks for new crops to be harvested—certainly not the end of the world.

The only area where some producers have shown concern is over vape cartridge supplies. Many of the components used to make disposable vape cartridges come from China, and there are worries that the supply chain will be interrupted. But vape cartridges only make up a portion of medical cannabis sales.

My advice: If you haven't contracted COVID-19, don't stockpile cannabis. You're not helping yourself as much as you are harming the community. Just think of all those empty toilet paper shelves at the supermarket—empty, despite the fact that there's no actual shortage. You don't want to be like those jerks who are currently sitting on mountains of useless toilet paper rolls while their neighbors collect napkins and newspapers.

To avoid a cannabis shortage, don't listen to people who have a vested economic interest in selling you stockpiles of cannabis. Just be a good neighbor and avoid hoarding what others could use for yourself.

If, however, you are one of the 23 New Mexico residents who (as of press time) have contracted the virus, then by all means, make arrangements with your favorite dispensary and buy a mountain of weed with which to hunker down.

Supreme Court Petitioned on GRT

Last week, the state Attorney General’s office filed a petition with the New Mexico Supreme Court on behalf of the state Taxation and Revenue Department asking for clarification on whether medical cannabis is exempt from gross receipts tax.

Under state law, businesses are required to pay a gross receipts tax to the state and municipalities for the privilege of doing business in those areas. The TRD says that tax is usually passed onto customers, either explicitly or by its inclusion in the retail price of the item.

But prescription drugs are exempt, and according to NM Political Report, some licensed cannabis producers say medical marijuana should be exempt, too. In 2014, Sacred Garden reportedly asked TRD for a gross receipts tax refund. The request was denied, but in January, a state Court of Appeals ruled that a medical doctor's recommendation to use cannabis was essentially the same as a prescription and agreed that medical cannabis should be exempt—the same as other prescription medicines.

The state Attorney General office's petition is asking for clarification before moving forward. In the request, Special Assistant Attorney General Cordelia Friedman says that since federal law forbids prescribing cannabis, the drug cannot be considered a “prescription.” “The term ‘prescription’ does not appear in the [Lynn and Erin Compassionate Use] Act or the regulation promulgated to provide guidance for individuals wanting to obtain ‘registry identification cards’ to receive medical marijuana,” Friedman wrote.

Friedman also questioned arguments that a tax exemption for producers and dispensaries would be passed on to patients. “There is no discernible benefit to those in medical need when Sacred Garden receives its requested refund predicated on past sales where it undisputedly [sic] charged gross receipts tax to its customers with no obligation to refund it to those customers,” Friedman wrote.

A number of dispensaries have reportedly promised to discontinue charging taxes following that Court of Appeals decision.

New Mexico Makes Top 10 List

In good news: New Mexico has one of the highest rates of dispensaries per capita in the nation—despite being a medical cannabis-only state.

A study commissioned by Verilife and released last month claims that New Mexico has 5.2 dispensaries for every 100,000 residents, making it the seventh most densely dispensary-populated state. The top state on the list was Oregon with 16.5 dispensaries for every 100,000 residents. Santa Fe made it onto the top 30 cities list—with 5.9 dispensaries for every 50,000 people.

New Mexico also made it onto the Top 10 list for taxation revenue collected from cannabis sales—coming in at number nine with around $9,000,000 in 2018. The top earner was California with a whopping $345,000,000 collected in the same time period.

According to the site, the study analyzed cannabis tax revenue data via the Department of Revenue in each state where medical or recreational marijuana is legal. The revenue data was from 2018, except for Massachusetts where data was only available for November and December of 2018.

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