Nine “enlightened” cities get ready to tax cannabis
By Benny Lopez
Rightly or wrongly, Proposition 19 went down in defeat last month—but that doesn’t mean that cities and voters in California aren’t prepared for a new era in legalized marijuana.
Voters in nine California cities approved measures to tax pot dispensaries this past Election Day. This can be taken as further evidence of widespread pro-pot attitudes in the state (46 percent of Californians voted “yes” on Prop. 19 after all), or at least a sign that more citizens accept cannabis’s current decriminalization status—so long as their cities can make some moolah from marijuana
“These nine cities represent the vanguard of cannabis law reform in the U.S., they create a natural base for support for reformers,” says Allen St. Pierre, executive director for NORML. “Absent cities and states pursuing this enlightened route, federal policy makers will not touch cannabis law reforms in Congress (where the laws really need to be changed).”
As well as the “enlightened nine” (Albany, Berkeley, La Puente, Long Beach, Rancho Cordova, Richmond, Sacramento, San Jose and Stockton), two cities saw voters shoot down measures to ban dispensaries (Morro Bay and Santa Barbara).
“The ordinance takes effect on July 1, 2011,” explains City of Sacramento Special Projects Manager Mark Prestwich. “Every person engaged in a marijuana business is required to pay a Business Operations Tax of 4 percent of every dollar in gross receipts. However, the ordinance provides the City Council with the discretion to lower or raise the tax rates from time to time, not to exceed the maximum tax rate of 4 percent for medical marijuana.”
In Rancho Cordova, voters approved a marijuana tax of up to 15 percent. A whopping 78 percent of San Jose voters went for a 10 percent rate. In Berkeley and Stockton the pot tax would be just 2.5 percent. More than two-thirds of voters in Oakland—which is widely regarded as Ground Zero for marijuana legalization (and last year became the first city in America to impose marijuana taxes)—gave the nod to a measure that would change the city’s existing pot tax from an almost nominal 1.8 percent to a substantial 5 percent.
Rancho Cordova’s pot tax “victory” was a hollow one, as that city expressly forbids dispensaries (their Measure H seemed to be a more of a contingency in case Prop. 19 passed). Over half of that city’s voters also said yes to its controversial Measure O, which would impose taxes of $600 to $900 per square foot on private marijuana cultivation. Opponents of this Personal Cannabis Cultivation Tax have declared it a de facto ban on cultivation and simply a preemptive effort to circumvent Prop. 19.
Even in a city like Sacramento, which currently has only “up to 39” dispensaries (according to Prestwich), annual revenue from the new tax could be up to $500,000. Imagine the fiscal implications for a mega-city like Los Angeles, where close to 600 medical marijuana outlets were reportedly operating this summer, or state-wide, where there are nearly 5,000 cannabis outlets (according to NORML).
Marijuana patients in the pot tax cities shouldn’t panic.
“Patients should not be negatively impacted too greatly by taxation as they’ll have an even stronger hand against government encroachment or harassment as taxed business ‘partners’,” says St. Pierre. “And/or they can grow their own medicine.”
