Pubdate: Wed, 01 Jan 2020
Source: San Francisco Examiner (CA)
Copyright: 2020 SF Newspaper Company LLC
Author: Mark Kreidler


For years, Richard Manning knew what he needed to cope with his
physical pain, rage and PTSD - much of which he traced to a
career-ending knee injury he suffered while on a domestic security
detail with the Marines.

Cannabis may not have been a cure-all, but it was the closest thing
he'd ever had to one.

Manning, a resident of Elk Grove, Calif., didn't have enough money to
buy the daily amount of cannabis he needed, but he was able to get it
through a network of charitable donors spawned by the Compassionate
Use Act, a 1996 California law that allowed marijuana to be used for
medical purposes.

In the wake of that law's enactment, growers and distributors began
donating part of their cannabis crop to often-tiny nonprofit
collectives - and later to dispensaries - which passed it along free
to low-income patients.

Using cannabis regularly helped Manning kick prescription opioids and
alcohol and get back on his feet, he said.

But the donations he relied on virtually dried up after the 2016
passage of Proposition 64, which legalized marijuana for recreational
use in California and began taxing it at every stage of production and
distribution - no matter its ultimate destination.

It treated any cannabis leaving a shop as a sale.

That meant cannabis was taxed the same - at rates that sometimes
exceeded 38% - whether it was donated or sold for profit.

When the taxes and the heavy regulations that accompanied them took
full effect in 2018, the impact on the compassionate care movement was
immediate and profound. Manning and others in his situation saw their
options dwindle.

Today, "the prices at dispensaries are out of reach if you need daily
medicine, and the taxes are about to go up again," said Manning, 44.
"So the black market is where a lot of veterans and low-income people

The prospect of poor and sick patients being driven underground for
cannabis, or losing access to it altogether, was a major impetus
behind a new law, SB-34, that will remove the cultivation, retail and
excise taxes on cannabis donated through compassionate care programs.

The law, signed by Gov. Gavin Newsom in October, eliminates much of
the financial liability that cannabis growers and distributors face
for giving their products away.

As a result, some compassionate care groups that curtailed or entirely
halted their charitable ventures in the wake of Proposition 64 are now
thinking about rekindling them. But even some of those who plan to
participate say it's unclear whether the full network can be revived.

"It's a little bit hard to see right now," said Lindsey Friedman, who
runs the Shelter Project, a charitable cannabis operation belonging to
Inglewood-based Jetty Extracts. "It's a weird, gray area."

The original intent of the Compassionate Use Act was to get cannabis
to patients battling cancer, AIDS, glaucoma and other illnesses. The
high cost of using it regularly was - and still is - a critical factor.

"It's expensive, and it's not covered by insurance," said Kimberly
Cargile, CEO of A Therapeutic Alternative, a Sacramento dispensary.

San Francisco's Sweetleaf Collective was one of the first mom-and-pop
nonprofits to collect cannabis donations and distribute them to people
in need. It started in 1996, immediately after the passage of the
medical marijuana law, delivering cannabis via bicycle to five AIDS
patients that year.

In time, dispensaries such as Cargile's started donation programs, and
large-scale manufacturers of cannabis products jumped in.

"It's part of the core of our company," said Friedman, noting that
Jetty began employing couriers in 2014 to deliver free cannabis each
week to hundreds of cancer patients statewide, regardless of their
income. Some other groups did the same.

Most non-cancer patients needed a medical card, a doctor's
recommendation or diagnosis and proof of low income to qualify for
free cannabis.

The San Francisco Bay Area was a hotbed of such compassion programs,
especially in neighborhoods where the bank accounts of HIV and AIDS
patients had been decimated by medical costs.

Sweetleaf founder Joe Airone told of patients who said they would have
died without the cannabis, which for many not only relieved pain but
also restored appetites that had been diminished by heavy use of

The Sacramento-based Weed for Warriors Project, founded in 2014, took
cannabis donations from growers and gave it to veterans. Sean Kiernan,
an ex-Army airborne infantry soldier and former Wall Street hedge fund
manager who heads the group, said many veterans - himself included -
found relief in cannabis and were able to kick the prescription
medications they took for service-related injuries, PTSD, depression
and other disabilities.

Proposition 64 changed the economics. It once cost Jetty Extract about
$10 a patient each month to donate cannabis, Friedman said. After
Proposition 64, it cost $100 a patient, which would have saddled Jetty
with a monthly tax bill of $50,000 per month for the 500 patients it
served at its peak, she said.

So the company closed the Shelter Project in 2018, Friedman said. It
reopened in 2019 and now serves about 50 patients a month. Sweetleaf
drastically cut its service and had to seek donations to cover taxes
on the limited amount of free cannabis it did provide.

Now, with the new law set to take effect in early 2020, some of the
midsize and larger players in the compassionate cannabis movement are
taking tentative first steps to resuscitate their charitable operations.

Kiernan wants Weed for Warriors to begin partnering directly with
small growers, creating a brand - "like Newman's Own," he said - that
would roll proceeds into cannabis relief for veterans.

Cargile said A Therapeutic Alternative will resume the cannabis care
packages it halted in 2018, with a planned donation in spring 2020 of
about $40,000 worth, and Jetty Extracts is exploring whether to expand
the Shelter Project.

But the era of mom-and-pop nonprofits that kick-started the movement
in the 1990s may be over.

"You might be facing $15,000 in licensing fees or more," said Manning,
who formed his own collective so he could donate cannabis to family
members and fellow vets, but abandoned it after the passage of
Proposition 64. "How are you going to operate like that?"

By Mark Kreidler, Kaiser Health News

(Kaiser Health News (KHN) is a national health policy news service. It
is an editorially independent program of the Henry J. Kaiser Family
Foundation. This KHN story first published on California Healthline, a
service of the California Health Care Foundation)
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MAP posted-by: Matt