One day before medical marijuana producers and state tax collectors were to face off before the New Mexico Supreme Court, the court ruled that cannabis used as a medical product can not be taxed.
The court issued its ruling on Wed., Feb. 23, the day before the sides were to make oral arguments, KRQE said.
Appellate Court Judge M. Monica Zamora wrote an opinion in 2020 that supported the tax exemption.
“It is reasonably self-evident that the deduction from gross receipts for prescription drugs was similarly intended to make medical treatment more accessible, by lessening the expense to those who require it,” Zamora said. “These statutes should be read harmoniously, to give effect to their commonality of purpose.”
The case has its roots in the fact that producers requested tax refunds in 2014 and 2018, but the NM Taxation and Revenue Department rejected those claims. At the appellate level, the court determined that medical marijuana must be treated as a medical prescription, and therefore can not be taxed, according to KRQE.
The state revenue department has collected an estimated $25 million to $30 million in gross receipts as taxes from medical marijuana producers, KRQE said. That will now have to be refunded.
The state’s largest producer of medical marijuana, Ultra Health, had not been charging patients because they believed they would win the case, and they will receive a refund of $7.4 million plus interest.