THE TURNING POINT

Assuming that California voters will pass the Adult Use of Marijuana Act (AUMA) in November, San Diegans who purchase legal recreational cannabis can expect to pay even more taxes than the state bill itself calls for, due to a proposal made by Councilman Mark Kersey. The San Diego City Council approved a ballot measure for the November election that could potentially impose an eight percent tax on recreational cannabis businesses if passed. Kersey claims the tax would be used to fund police, code enforcement officers and other city workers who regulate and monitor cannabis businesses. A vote of 7-2 in early July moved the measure to the City Attorney’s office to draft the measure, according to KPBS Radio News. It will take a few weeks for the final approval to be given. This measure would only go into effect if recreational cannabis becomes legal in California this November.

Although they have not specifically spoken out against it, industry insiders and cannabis advocates fear that the proposed excessive taxation could lead to inflated prices that would encourage consumers to purchase from the black market, rather than licensed retail outlets. Opponents of cannabis legalization are also concerned about the possibility of a larger black market, but with different reasoning. They feel that the government taxing cannabis legitimizes what they believe is a “harmful drug” that is still illegal under federal law. Many other cities in California have already passed local cannabis taxes, such as Los Angeles, Long Beach, Oakland, Sacramento, San Jose, Berkeley, Palm Springs, as well as other smaller cites. San Diego would be the first city in the county of San Diego to adopt such a measure.

“I can see a lot of good uses for these tax dollars, perhaps promoting cannabis tourism in San Diego or addressing substance abuse issues. It’s definitely an issue that should be discussed and the voters should decide it.”

Rachel Laing, spokesperson for the United Medical Marijuana Coalition feels optimistic that Councilman Kersey will listen to their concerns and make adjustments to the proposal, such as lowering the tax rate, saying “We’ve had constructive initial conversations with Councilman Kersey’s office about this proposal. As San Diego’s only legal, tax paying cannabis business operators, our members have valuable insight and data that can inform the city’s framework for a tax, and thus far we’re optimistic they’ll take our input into consideration as they craft the ballot measure.” So far, Kersey appears to be open to negotiations saying he is flexible and that the subject is “up for discussion.”

Attorney Lance Rogers, who has represented many collectives and patients stated that his position will hinge on how the tax dollars are used, saying “I can see a lot of good uses for these tax dollars, perhaps promoting cannabis tourism in San Diego or addressing substance abuse issues. It’s definitely an issue that should be discussed and the voters should decide it.”