Adult-use cannabis is currently legal in 15 states plus the District of Columbia. A medical marijuana programme is in place in twenty additional states. You are breaking the law if you use marijuana in one of those states without an MMJ card. However, in places where marijuana use for recreational purposes is legal, you can typically purchase up to an ounce by walking into a dispensary.
You should have no problems as long as you are at least 21 years old and can provide identification. So why bother applying for MMJ if you reside somewhere like California where marijuana for adult consumption is legal?
Purchasing a medical marijuana card in a state where it is legal for adults to use it is advantageous for a number of reasons. You save money, but there are also many additional benefits. In this article, we examine them all.
Please be aware that a number of adult-use states still lack an effective recreational sales program. In New Jersey, it is still prohibited to use cannabis without an MMJ card. To guarantee you have the most recent information, check your state’s legislation.
The conditions vary depending on where you live, but for the most part, MMJ cardholders may anticipate paying a lot less tax. As you will see below, several states have exorbitantly high recreational cannabis tax rates.
On the other hand, people who have MMJ cards don’t have to pay the “sales and use” tax when they buy marijuana from a dispensary. This also holds true for purchases of edibles, concentrate, and topical items made from cannabis.
Present your Medical Marijuana Identification Card (MMIC) to avoid paying this specific cannabis tax. If not, you must pay an additional fee of at least 7.25%, and more.
Golden State Tax Confusion
Americans regularly worry about how different governments handle taxes. As a result, it is not surprising that the marijuana tax is similarly unclear. California is one of the states with the highest cannabis taxes.
Purchasers are required to pay an excise tax in addition to the state sales and use tax and local taxes under Proposition 64. You typically pay at least 20% tax if you have an MMJ card. Recreational users, meanwhile, spend more than twice that amount. Even worse, California’s tax rate increased in 2020.
California residents have to pay three different fees:
1. Sales and use tax: In some areas, this state tax might be as high as 10%. It also includes extra district fees, which occasionally may overlap. The excise tax and retail price are added together to determine the tax. Thankfully, owners of MMJ cards are exempt from paying this tax.
2. Excise tax: Another state tax, this one calculated using the wholesale price, usually accounts for 15% of the retail price. This tax cannot be avoided.
3. Local tax: Some cities and counties in California impose a tax of 10% to 15% on retailers. As a consumer, you will be charged at least 5% for this tax, and even MMJ cardholders are not exempt.
In Colorado, recreational users must pay the following taxes:
1. State sales tax
2. Local sales taxes
3. An additional 15% state marijuana sales tax
However, if you have an MMJ card, you are exempt from paying the sales tax.
This situation is similar in all states that allow both recreational and medicinal marijuana. By going through the process of obtaining an MMJ card, you can generally expect to pay lower taxes, although the exact amount saved varies from state to state.
How Much Can I Save with an MMJ Card?
Take a brief overview of the different taxes imposed in states that permit the use of both recreational and medicinal marijuana.
The state doesn’t impose a sales tax. Growers are required to pay $50 per ounce of bud. When selling to merchants or dispensaries, the price per trimmed ounce is $15. As a result, rather of a sales tax, this expense is passed through to customers. Cannabis has a tax rate of 20% because it costs about $300 per ounce overall.
Applying for an MMJ card costs $25, and renewing it costs $20. A doctor’s visit typically costs between $200 and $250. An MMJ card typically costs $225. It is questionable whether you should obtain an MMJ card in Alaska for savings alone due to the absence of a sales tax.
The Golden State’s taxation system’s complexity has already been discussed. A product tax is also levied on growers of
A leaf ounce costs $2.87.
A pound of flowers costs $9.65.
A new ounce of marijuana plant material costs $1.35.
Customers of adult-use cannabis in California are subject to significant expenses. Along with the 15% excise tax, there is also a cultivation tax, a local tax, an 8â10% state tax, a 5â15% cannabis company tax, and a local tax. You are exempt from paying the state sales tax if you have an MMJ card. The local governments may impose a sales tax on MMJ in addition to the 15% excise tax that you must pay.
A doctor’s visit might cost as much as $150, and applying can cost as much as $100. Marijuana often costs around $250. To make the MMJ card cost worthwhile, Californians would need to use at least four ounces of marijuana annually.
Holders of MMJ cards in Colorado must pay the 2.9% state sales tax. If you buy recreational marijuana, you do not have to pay for it. However, there is a 15% retail marijuana tax on marijuana and cannabis-infused items. It is included in the final cost. Additionally, there is a 15% excise tax that MMJ is exempt from.
Local sales taxes, which vary from county to county, are additionally due. For instance, all medicinal marijuana products in Denver are subject to a 4.31% regular sales tax. There is also the minor issue of the 5.5% special sales tax rate. As a result, you can get 12.71% by adding 9.81% to the remaining 2.9%. However, recreational users must pay an astonishing additional 30%, or 42.71%!
In Colorado, an ounce of high-quality marijuana costs no more than $240. A doctor’s visit, a renewal, and an application all cost well over $200. To notice a financial advantage, you usually don’t need more than six ounces every year. Applying for an MMJ card in Colorado is probably worthwhile if you use at least that much.
Illinois legalized cannabis for adult use on January 1st, 2020. However, it took some time before the first dispensaries for recreational use were granted licenses. For products with less than 35% THC, residents will pay 10%. Cannabis that contains more than this amount is subject to a 25% tax. A 20% tax is applied to marijuana-infused products with a THC content of over 35%.
County boards may impose a 3.75% tax on vendors in unincorporated regions, and some municipalities have the authority to charge a 3% tax on cannabis shops. Customers must pay a 1% pharmaceutical sales tax, while MMJ growers are subject to a 7% privilege tax.
Patients who use MMJ may save up to 34.75% overall on taxes! A one-year card costs $100, a two-year card costs $200, and a three-year card costs $250. A consultation costs the customary $200+ as well. Even as the recreational market expands, getting an MMJ card in Illinois is worthwhile due to the significant tax savings.
Recently, the state legislature implemented a 10% excise tax on retail sales of cannabis in Maine. MMJ is subject to a 5.5% sales tax, while edibles are charged an 8% ‘prepared food rate’.
Maine growers must pay specific excise taxes, which are ultimately passed on to consumers: $95 per pound of trim, $335 per pound of flower or mature plants, $150 per immature seedling or plant, and $0.30 per seed.
The application fee for an MMJ card in Maine is $100, and a doctor’s appointment can cost $300. Considering the high average cost of an MMJ card, residents of Maine would need to purchase 16 ounces per year to justify the expense, equivalent to about one-eighth every three days.
Initially set at 3.75%, the excise tax in Massachusetts was raised to 10.75% in 2017. Overall, users pay around 20% in tax, although medical patients are exempt from the 6.25% sales tax.
Applying for and renewing an MMJ card costs $50 each, and a doctor’s appointment can amount to $200. Cannabis prices in the state can reach up to $340 per ounce. Thus, Massachusetts MMJ cardholders start saving money on taxes if they purchase more than five ounces per year.
In Michigan, recreational sales started in December 2019. The 6% sales tax is paid by MMJ cardholders. However, there is an additional 10% excise charge for recreational users.
The average consultation costs about $200, and the Michigan Registry Patient charge is $40. Your card can be renewed for $150 and is good for two years. Even if you pay less tax, an MMJ card won’t save you much money overall unless you use a lot of cannabis.
All users in Nevada must pay a 15% excise tax on wholesale cannabis sales, which remains unchanged for MMJ cardholders. Additionally, a 6.85%-10% sales tax applies. However, medical cannabis is exempt from the 10% retail excise tax.
To obtain a medical marijuana card in Nevada, a one-year card costs $50, while a two-year card costs $100. A doctor’s appointment can amount to approximately $200. While an MMJ card provides modest tax savings, substantial cannabis consumption is required to justify the application costs. Dispensaries in Nevada accept out-of-state cards through reciprocity for residents of other states.
Cannabis consumers must pay a total retail tax of 17%, with an additional 3% that may be added by some towns and counties. Owners of MMJ cards are not subject to these taxes. However, an ounce of marijuana only costs $210 on average.
Oregon has one of the highest MMJ card application fees in the nation at $200. For a consultation, you could spend an additional $200. Even after accounting for tax savings, the price needs to be justified by purchasing a lot of cannabis.
At 37%, this state’s tax rate is the highest; it was previously 75%. In addition, there is a choice to add local sales taxes and a sales tax of 7.4% to 10.4%. MMJ cardholders must pay a 6.5% state sales tax. A doctor’s visit can cost up to $200, yet applying for and renewing the card just costs $5.
Overall, a Washington MMJ card wouldn’t be worthwhile unless you spent at least 12 ounces on marijuana each year. But hold on! Only those with an MMJ card are authorised to grow marijuana plants. Instead of the one ounce that recreational users are allowed to carry, you can carry three. You may use your card to make hundreds of dollars in annual savings after you learn how to grow.
Although marijuana is legal to use in Washington, D.C., recreational marijuana sales are prohibited. But you can own and cultivate it. After charging for another item, some sellers also gift cannabis to customers. However, the District wants to severely restrict this practice.
How Cultivating Your Own Marijuana Can Slash Expenses for Medical Marijuana Cardholders?
Holders with medical marijuana cards may be permitted to grow their own marijuana plants, subject to the laws of the state. This can result in considerable cost reductions. Cardholders can avoid paying higher charges at dispensaries by producing their own supply. Growing marijuana plants can result in significant savings, especially for people who need bigger amounts for their medical requirements.
For individuals who require ongoing marijuana treatment, the financial advantages of having a medical marijuana card can make a significant difference, allowing them to focus on their health and well-being without straining their finances.