If you’ve paid any attention at all to the Cali cannabis scene over the past two decades you’re probably familiar with the term Prop215, but most do not know that the full name for the bill was the Compassionate Use Act of 1996.
Prop215 and the subsequent SB420 merged to form the largest medical marijuana market that the world has ever seen and that essentially self-regulated theater of operations could be pretty cutthroat at times, but it certainly cleared out a much-needed sector for the truly compassionate players in the game.
Unfortunately, when California voters tipped the polls in favor of Prop64 back in November of 2016 the sun began to set on the Compassionate Use Act and things got dark for those who had come to count on these sorts of programs to get proper medication.
Advocates for these compassion programs gave a voice to this struggle and Senate Bill 829 was introduced last year in order to restore some of the rights that had been stripped by legalization. It aimed to make right what Prop64 had gotten wrong when it came to donating cannabis to those in need. Sadly, in one of his final acts as governor, Jerry Brown vetoed the popular legislation when it got to his desk saying that it “undermines” the “intent of the voters”.
At the heart of the matter is taxation. Prop64 created a multi-tiered supply chain model with several distinct stops on that chain between when a cannabis plant is grown and harvested, and when it actually gets to the end user in whatever its final form will be. The state sticks its hands in at nearly every stop demanding a cut.
Cultivation taxes, excise taxes, and state and local sales taxes all stack up to cut into already tight profit margins. But one of the biggest tragedies of Prop64 is that it failed to carve out any sort of exception to this burdensome taxation for organizations or individuals who are looking to generously donate cannabis goods to people in need.
Roughly 6% of America’s overall population is made up of military veterans. Of those millions of vets – men and women who served their country – anywhere from 10-20% of them report using cannabis medicinally to treat some sort of ailment or injury.
That equates to millions of U.S military veterans who cannot turn to the VA and the healthcare benefits that they earned with their service due to federal cannabis prohibition. These vets in need were some of the most beneficial recipients of compassionate care cannabis programs in California and way too many of them were left hanging the day that Prop215 expired.
Compassion isn’t illegal under Prop64, it’s just insanely expensive. Every tax dollar that the state rakes in on such a donation is one less dollar going to those in need. This new added cost on what was always a truly non-profit act quickly weeded out many of the groups that organized these giveaways as well as many of the companies that had given so generously in the past.
With the well-being of our nation’s veterans in mind, one of the groups that has helped to take point on the task of providing safe access to free meds for vets in California is the Santa Cruz Veterans Alliance (SCVA), a self-funded, vertically-integrated, and highly compassionate yet down-to-earth cannabis company and advocacy group in Northern California.
With roots that run deep into the culture of Prop215, SCVA has weathered the storms of regulation better than many and now they vow to continue the mission for compassion.
CHARLIE MIKE (CONTINUE THE MISSION)
A country boy from Alabama, Jason Sweatt enlisted in the United States Army in 1996 beginning what would become a decade-long career in the military that ended with an Honorable Discharge as a Staff Sergeant in 2006.
In that time, Jason served in Iraq in 2004-05 as a squad leader with the 1st Cavalry Division before finishing his duty with the Army in Hawaii where he made residence during his transition back to civilian life. That transition proved difficult for Jason, as it does for many of our vets, but after taking a few tokes with a friend and finding instant relief from his persistent anxiety he was all in on cannabis. Jason was fortunate to live in a state liberal enough that he soon began growing his own cannabis – a single light closet grow banging out two or three plants at a time.
By 2008 Jason had relocated ‘back east’ from Oahu to the San Francisco Bay Area, and then again further south to Santa Cruz, where he found work in a local gardening store and another release for his new emotional outlet, what he calls his “horticulture therapy”.
“Seeing something fruit and reaping the benefits of that was a big win for me,” says Jason recalling his own reintegration into mainstream society.
It was at the garden store that Jason met a fellow veteran named Aaron Newsom who shared his passion for cultivation and for cannabis. The two pooled their limited resources and landed a small but viable commercial spot and set up their first collaborative grow.
The Santa Cruz Veterans Alliance was founded in 2011 by Aaron and Jason and together they created a new way to continue their mission of giving back to their brothers and sisters in arms who they felt were being left behind.
COST OF COMPASSION
By 2013-14 SCVA was in full swing. The grow in Santa Cruz County was producing some of the finest flowers in the region with product being split between their own compassion program for local vets and their wholesale distribution to local dispensaries. Those proceeds were poured back into the grow keeping the entire loop closed and very sustainable.
SCVA began holding bimonthly meetings at the local VFW where dozens of vets would assemble to socialize, stay informed, and if needed get some free cannabis products to help with whatever battles they currently faced.
Donations in those days were flooding in, from pounds of pristine sungrown buds from local farmers to boxes stuffed with hemp-derived CBD wellness products from sources coast to coast, and so many other generous donations, SCVA was able to provide an extremely beneficial service to hundreds of local vets without decimating the bottom line of their company that was making it possible.
With a mind wired for business, Jason had always kept meticulous records dating back to 2011 and the inception of SCVA. They were incorporated and held a state seller’s permit and paid their taxes as best they could given the distinct lack of governmental guidance that defined the Prop215 era.
But one day a YouTube video of an event at which SCVA was gifting a considerable amount of cannabis to vets in need surfaced in the offices of the California Department of Tax & Fee Administration (CDTFA). They hit up Aaron and Jason and asked what the video was all about and, with nothing to hide, the guys told them of their efforts to help those in need over the past three to four years.
Their thanks? A fat bill for back taxes apparently owed to the state for every bit of bud that the group had ever gifted or donated.
“What could we do?,” says Jason looking back, “we rolled with it.”
SO THIS IS LEGAL WEED
Santa Cruz Veterans Alliance is a truly vertically integrated company, meaning that they have the ability to take their work from seed to sale totally in-house. They have been granted a cultivation license, a distribution license, a Type 7 Manufacturing license, and they have a licensed retail dispensary – just one of 13 stores in Santa Cruz County.
Their products are distributed by Kiva Sales & Services to 25 top shelf dispensaries statewide, and can be found in three additional stores in Santa Cruz County.
Newsom and Sweatt added a third partner, Seth Smith, a Navy vet who now serves in the role of communications director for SCVA. Together the three partners have managed to remain completely self-funded – a rarity of its own in today’s legal landscape.
About half of their workforce is made up of combat veterans, some of whom have 90-100% service connected disabilities from the VA but who have found camaraderie and a new way to serve in their role with SCVA.
In fact, their workforce doubled after the passage and implementation of Prop64 and they now employ 19 people, compared to eight in the old days.
From the outside looking in, it may seem that life is all good at SCVA in the wake of sweeping regulatory reform in the state, but as Jason puts it, “It’s a challenge, but we are not afraid of a challenge. There’s been good, and there’s been bad.”
Given their full spectrum view of the entire supply chain in California cannabis, SCVA feels the full burden from the state’s shortsighted tax structure – a weight that has hindered their growth but they refuse to let stop their mission.
For example, the local Santa Cruz Cannabis Business Tax is 7%. The California State Sales Tax in Santa Cruz County is another 8.5%. Then the state hits them with a 15% Excise Tax. All of that on top of about $150/lb for a Cultivation Tax. When you tally it up their tax burden is over 30.5% whether they are trying to sell the product or give it away to those in need.
They take that entire hit on every nug they give away, and they absorb as much of it as they can when they are making a sale. But Santa Cruz County has a deeply rooted cannabis culture and it took some in-depth customer education to get their loyal patrons to figure out the new math once the game changed beginning last year.
For Aaron, Jason, and Seth, compassion remains their highest priority.
RESPECTING THE PAST, LOOKING TO THE FUTURE
As Jason puts it, “This whole thing was built around Prop215, the Compassionate Care Act.”
He points to local legends like Valerie and Mike Corral of the WAMM Collective in Santa Cruz. Their community collective garden allowed patients to participate in the grow in order to earn their share of the harvest. They blazed a trail for cannabis and compassion and their reward was a 2002 raid by the DEA who completely destroyed their garden and their research. The Corral’s sued the feds and won and their garden has since been replanted to its former glory as they too try to navigate the tangle of regulatory red tape to enter the industry.
He gives full respect to Dennis Peron who also helped to define the term compassion for our culture and who has been dealing with raids and harassment from the law dating back to the 1970’s.
“That was the foundation for all of this,” says Jason, “so we’ve got to keep pushing forward and we’ve got to let these bureaucrats know that we’re going to keep fighting for this.”
Jason and his partners at SCVA are actively working with receptive lawmakers in the state capital to help advance the 2019 version of SB829 which they are confident will get a better reception from newly installed governor Gavin Newsom.
These days SCVA ‘Veteran Compassion Program’ meetings are no longer held at the VFW, but instead at the aptly named Santa Cruz County Veterans Memorial Building located at 846 Front Street in Santa Cruz.
The guys refer to their new meeting spot as a home away from home, “It’s where we should have been to begin with.”
They meet on the first monday of each month at 5pm. Attendees are welcome to bring up any issues or concerns that they may have, present ideas to the group, and socialize with fellow veterans who can empathize with their unique life experiences better than most.
SCVA invites other veteran service providers to set up informational tables at the meetings as additional resources for those who attend. The meetings generally last an hour or less.
While there is no consumption onsite, SCVA has structured a giveaway program for their members in need that satisfies the current state laws but comes at a pretty steep cost to them to cover the taxes involved. In the immediate wake of Prop64 that once-massive flow of donations from outside companies ground to a halt as everyone found themselves treading water financially. Fortunately for these vets, donated product has begun to trickle back in and SCVA generously provides the rest.
As legalization continues its march toward true cannabis reform on the federal level more and more veterans will be turning to marijuana as a natural and safe alternative to opioids and other harmful prescription drugs.
Jason’s advice to those who may be new to the plant is simple, “Go low and slow. Don’t bite off an entire 100mg chocolate bar, don’t do a dab. Find yourself a bowl or a joint and ease into it.”
He encourages fellow vets to not shut themselves off to the world but instead to find groups like SCVA where they can find purpose once again in getting and giving support to those in need.
The Santa Cruz Veterans Alliance official Instagram page with over 14,000 followers was deleted by the notoriously cannabis-hating platform in December of last year but you can help them build that back by following their new page at @scvetsalliance
Additional ways to support their cause include seeking out SCVA-branded products at your favorite dispensaries or asking them to carry those products. Their Kosher Kush is considered by many to be one of the highest quality strains in the entire state – get some.
Also, if you are a California state-licensed cultivator, manufacturer, distro, or retail who recognizes the purpose behind SCVA’s plan you can contact them through social media to arrange for a donation of your own, knowing that it will go directly to a veteran who will appreciate it and benefit from it.
At Beard Bros. Pharms we are incredibly proud to know these fellas and to call them our friends. The SCVA story is still being written, and we look forward to helping them tell it. Look for further collaborations between our two crews very soon.