Lessons from a Near Catastrophe

Phoenix City Council unanimously voted down Mayor Williams' medical marijuana business tax proposal in a standing room only session on September 27, 2018.

Things got pretty scary here in Phoenix in early October – and it had nothing to do with Halloween.

On Thursday, September 27, Interim Phoenix Mayor Thelda Williams unveiled a troubling new tax proposal on medical cannabis businesses in the city to fund public safety services. While the proposal included several different potential tax options, all were excessive, threatening to add a million dollars or more to many local cannabis businesses’ tax burdens. The effects on the state’s medical cannabis program and its patients had the potential to be cataclysmic. Many operators would have likely failed or been pushed out of the Phoenix area. Established businesses in other areas would have faced increased competition and possible market saturation as Phoenix licenses relocated. In a troubling domino effect, other municipalities would have likely followed suit with their own excessive marijuana taxation programs. The few businesses left standing would have been left with no choice but shift the burden of rising costs onto patients

Even more concerning, instead of first evaluating the proposal in a city council subcommittee, the plan was fast-tracked to be voted on just five days later, on Tuesday, October 2. By leaving potential opponents with so little time to prepare or voice their concerns, the tax proposal seemed primed to succeed.

But that’s not what happened.

During the Tuesday hearing, the Phoenix City Council unanimously voted down the potential tax, with several council members criticizing the proposal and the manner and timeframe in which was brought to a vote. The audience at the hearing that day likely helped settle matters. In a matter of hours, the medical cannabis businesses, patients, professionals, caregivers, and supporters in and around Phoenix mobilized en masse to ensure their disapproval of the proposal was heard. Concerned citizens packed city hall, opposing the proposal and wearing stickers that read, “No tax on medicine.”

At the end of the day, we were victorious. Now, as the dust has settled, I have a couple takeaways from the experience.

First: While Arizona might currently boast one of the largest and hottest medical cannabis markets in the country, it’s clear we still need to work to safeguard the rights of the state’s medical cannabis patients. We were already reeling from a deeply concerning Arizona Court of Appeals ruling over the summer that suggested Arizona medical patients did not have the right to possess or consume hashish under the protection of the state’s medical cannabis program. Now, a single city proposal came frighteningly close to impacting the entire statewide industry. Of course, at the end of the day, our goal remains to have the federal government declassify cannabis as a Schedule I controlled substance. In the interim, we all need to be vigilant in protecting the medical cannabis rights approved by Arizona’s voters.

Second: I came away from the council hearing more confident than ever in the local medical cannabis community. When the pressure was on, we mobilized forcefully and intelligently and struck down a measure that had the very real potential of being approved. If we can do such a thing with such short notice, we will be able to do it again in the future. But instead of just being reactive to harmful political proposals, we need to work together to proactively lobby and work together with local municipalities, community leaders and political bodies to ensure the implementation of smart and reasonable laws and regulations.

There’s no question that Arizona’s cannabis industry strongly supports its police, fire, first responders, and other city services and desires to contribute positively to their local communities. But instead of balancing any budget shortfall on the backs of medical marijuana patients, it’s important that the medical cannabis community engage with local government, working together to find ways to sustainably fund these essential services without crippling one of the state’s most vibrant and beneficial new industries along the way.

If we make such an effort now, we will be far less likely to face more frightening political surprises in the future.