Panel shelves tax on medical marijuana

SANTA FE (AP) - A proposal to tax medical marijuana in New Mexico ran into strong opposition on Friday and a House committee shelved the measure.

House Bill 186 would impose a 25 percent tax on the value of marijuana grown for medical purposes.

A 2007 law allows people with certain medical conditions to get relief by using marijuana. About 1,000 patients are registered with the state.

One of those patients, Paul Culkin of Albuquerque, told lawmakers he spent $800 a month for two ounces of medical marijuana. The 30-year-old Army veteran suffers from post traumatic stress disorder.

A tax would increase prices, Culkin said, and "this would cause me to go out on the street" to buy cheaper marijuana.

"We don't want to drive patients to the black market," said Reena Szczepanski of Drug Policy Alliance New Mexico, who lobbied for the medical marijuana law.

The state doesn't tax prescription medicines and opponents said the medical marijuana tax would hurt patients with serious illnesses, including cancer, multiple sclerosis, Lou Gehrig's disease, HIV-AIDS and certain spinal cord injuries.

"Most of the patients are on fixed income," said Szczepanski.

Len Goodman runs a nonprofit that is one of five licensed by the state to produce and distribute medical marijuana. He sells marijuana for $280 or $360 an ounce.

Goodman said patients can't afford to pay the proposed 25 percent tax and producers can't absorb the tax in their costs.

"The licensed producers are working on very thin margins," he said.

The bill's sponsor, Rep. William Rehm, an Albuquerque Republican and retired police officer, said he proposed the tax to help provide money for Medicaid. The program provides health care for the needy and is facing cutbacks because of a state budget crunch.

The tax could generate $1 million a year, according to a legislative bill analysis. But Rehm said the estimate was highly uncertain because of a lack of information on marijuana prices.

The House Taxation and Revenue Committee voted 14-1 to table the bill, which probably dooms it for the session. The measure remains alive but it's bottled up in committee unless members change their minds, which appears unlikely to happen. A similar proposal is pending in a Senate committee.