State economists Monday concluded that they are unable to calculate the cost to local and state governments if voters were to approve a medicinal marijuana amendment next November. The Department of Health told a Financial Impact Estimating Conference it expects if the amendment were to pass then its regulatory obligations would cost about $1 million a year. Economists and analysts with the FIEC expect fees charged to medical marijuana users, growers and distributors to pay DOH's expenses.
“The Department of Health obviously does not have a fee structure for medical marijuana, but I think based on experience in other states and based on the way Florida typically handles things like this I think it’s likely there will be a fee structure authorized by the Legislature,” said Amy Baker, the state's chief economist who chaired the meeting. “The fees will be used to offset regulatory costs.”
However, on the issues of what effect the proposed constitutional amendment would have on government revenue (income) or budget (expense) the FIEC reached no conclusion. Twenty states have legalized marijuana for either medicinal or recreational use. In California, a 7.5 percent sales tax on medicinal marijuana reaps $100 million annually. In Colorado, a 2.9 percent tax on recreational marijuana generates $11.4 million.
The FIEC calculated that a minimum of 417,000 Floridians would qualify for certification to use marijuana to treat a debilitating disease. It estimated medical marijuana would cost between $225 and $450 an ounce.
The FIEC concluded that marijuana, as tangible personal property, is subject to the sales tax if no exemptions apply. However, further guidance from either the Legislature or agency rule-making should the amendment pass is needed to determine whether an agricultural, prescription drug or common household remedy exemption would apply.
The impact on property taxes is also unclear. The FIEC concluded that growing medical marijuana would likely qualify as agricultural property, but depending on the property used to cultivate the plant it could increase or decrease the taxable value of the land.
The FIEC is charged with producing a 75-word ballot summary, a 500-word analysis and a report explaining and supporting its conclusions for the Florida Supreme Court. The documents were sent Monday afternoon to the court.
Attorney General Pam Bondi has asked the court to block the referendum, arguing it is misleading. The justices will hold a hearing Dec. 5. They will decide the issue, but it may be moot. Amendment supporters must collect 700,000 signatures by Feb. 1, and according to the Division of Elections website, 121,000 have been submitted for verification.
Related Research: Materials from the Office of Economic & Demographic Research Financial Impact Estimating Conference's formal conference held November 4, 2013 on the Use of Marijuana for Certain Medical Conditions Constitutional Amendment by Citizens' Initiative
* Full Text of the proposed amendment
* Financial Impact Statement
* Summary of Financial Information Statement
* Complete Financial Information Statement
* Oct. 21, 2013 Public Workshop notebook
* Oct. 28, 2013 Principals' Workshop notebook additions
* Oct. 31, 2013 Principals' Workshop notebook additions
* Nov. 4, 2013 Formal Conference notebook additions
* FL Dept. of Revenue's Nontaxable Medical Items and General Grocery List
* Transmittal Letters
* Response from The Florida Police Chiefs Association
* Written Testimony Regarding Amendment from Opponent
* Colorado's "Medical" Marijuana, August 2012
* The Legalization of Marijuana in Colorado: The Impact, August 2013
* Correspondence Regarding Amendment
Reporter James Call can be reached at [email protected].
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