New state law requiring hefty taxes on cannabis and tracking from seed to sale quashed giveaways around the state for patients under the 1996 Compassionate Use Act, but one compassionate use program has resurfaced in Santa Cruz.

This month, the Santa Cruz Veterans Alliance restarted its program to provide medical marijuana to military veterans at a new location, the Santa Cruz Veterans Memorial Building, 846 Front St.

About 85 people came, filling the hall for an hour, learning about a new then heading to the Santa Cruz Veterans Alliance dispensary to pick up their product.

“It’s a great location,” said James San Miguel, 65, a Vietnam veteran who left in a wheelchair. “Finally the veterans get to use the veterans hall.”

Seth Smith, 36, a Navy veteran who is communications director for the Santa Cruz Veterans Alliance, concurred.

“It feels like a homecoming,” he said. “We should have been here all along.”

The Santa Cruz Veterans Alliance, founded by veterans Aaron Newsom and Jason Sweatt, grows cannabis and funds the giveaway out of sales to cannabis dispensaries. They view medical marijuana as a better alternative than addictive opioids that are typically are prescribed for pain.

Both Newsom and Sweatt found relief from post-traumatic stress disorder via medical marijuana despite a 1937 federal law halting scientific research on cannabis and the 1971 decision during the Nixon Administration to classify marijuana as a dangerous drug in the same category asLSD and heroin.

In 2016, more than 100 veterans took advantage when the Veterans Alliance offered medical marijuana at the Veterans of Foreign Wars Post No. 7263 in Live Oak and then at the Live Oak Grange.

That was before California voters approved Proposition 64 in November 2016 allowing adult use of cannabis, triggering new licensing requirements and a 15 percent state excise tax and county environmental review culminating in new regulations in May.

One unexpected outcome was the discovery that the initiative did not specifically exempt “compassionate care” programs from paying the excise and cultivation taxes on products that brought in no revenue.

“These donation-based programs cannot afford the new taxes attached to cannabis and most have been forced to close their doors,” according to State Sen. Scott Wiener, D-San Francisco, who introduced SB 829 in April to rectify the situation.

The bill is supported by the Wo/Men’s Alliance for Medical Marijuana in Santa Cruz and the Santa Cruz County Board of Supervisors.

It was passed in May by the State Senate, with State Sen. Mark Stone, D-Scotts Valley, and State Sen. Bill Monning, D-Carmel, in favor, then was passed by three Assembly committees.

Last week, the bill was sent to the Appropriations Committee, which reviews fiscal bills.

The Wo/Men’s Alliance for Medical Marijuana a collective with a 25-year history, is among those adjusting to the new regulatory landscape. It is currently closed but has found a new home and expects to reopen in August, according to its website.

Smith said the Santa Cruz Veterans Alliance, which has 15 employees, plans to co-locate its manufacturing facility at 274 Kearney St., Watsonville, with the indoor cultivation operation.

“It’s a larger facility designed from scratch,” he said.

The advantage, he said, is Watsonville taxes are based on square footage, and thus are less than those charged by Santa Cruz County.

He expected testing under the new law to take place this month, noting only 30 labs are certified, including SC Labs in Santa Cruz.

“The price for testing skyrocketed,” he said.

That is affecting the price and availability of medical cannabis.

“We were sold out of product for three months,” Smith said. “We have orders… We can’t grow it fast enough.”