Medical cannabis: regulation and taxation amnesty.

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, exempts from specified criminal penalties the possession or cultivation of medical marijuana by patients and primary caregivers. Existing law, the Medical Marijuana Program, requires the State Department of Public Health to establish a voluntary program for the issuance of identification cards to qualified patients and primary caregivers under the Compassionate Use Act, and grants immunity from arrest for violation of specified provisions relating to the cultivation, possession, transportation, and sale of marijuana, if conditions of the act are met. Existing law imposes sales and use taxes collected and administered by the State Board of Equalization. Existing law sets forth various penalties, including penalties for the nonpayment or late payment of those taxes, and the failure to file or intentional filing of incorrect returns. Existing law established a tax amnesty program, conducted in 2005, with respect to sales and use tax penalties. This bill would require the State Board of Equalization to administer a tax penalty amnesty program during the period beginning on July 1, 2017, through December 31, 2017, inclusive, for medical cannabis-related businesses, as provided. The bill would define a medical cannabis-related business for these purposes as a person that engages in the sale of cannabis for medical purposes to qualified patients or the primary caregivers of qualified patients pursuant to the Compassionate Use Act or the Medical Marijuana Program. The bill would require the Department of Consumer Affairs to suspend or refuse to issue a state license to a medical cannabis-related business that is eligible to, but does not participate in, the program and meets other specified conditions. (2) This bill would make related findings and declarations. The bill would also make technical and conforming changes. (3) Existing state constitutional law prohibits the Legislature from making any gift, or authorizing the making of any gift, of any public money or thing of value to any individual, municipal, or other corporation. This bill would make certain legislative findings and declarations that a tax penalty amnesty program to incentivize a specific type of business to become current with its tax obligations serves a general public purpose and therefore is not a gift of public funds. (4) This bill would incorporate additional changes to Section 19323 of the Business and Professions Code proposed by AB 26 that would become operative if this bill and AB 26 are enacted and this bill is enacted last.