Pubdate: Sun, 26 Jul 2009
Source: Oakland Tribune, The (CA)
Copyright: 2009sANG Newspapers
Contact: http://www.insidebayarea.com/feedback/tribune
Website: http://www.insidebayarea.com/oaklandtribune
Details: http://www.mapinc.org/media/314
Author: Angela Woodall
Bookmark: http://www.mapinc.org/find?115 (Cannabis - California)
Bookmark: http://www.mapinc.org/mmj.htm (Cannabis - Medicinal)
Bookmark: http://mapinc.org/topic/dispensaries

MEDICAL MARIJUANA TOUTED AS CURE FOR CITIES' BUDGET WOES

Oakland attracted national attention last week with the country's 
first voter-approved medical marijuana business tax -- a 15-fold 
increase that won easy victory in a special election Tuesday.

Some supporters -- including some operators of the dispensaries that 
will be taxed -- see the measure as a step toward legalizing 
marijuana. Cities with dispensaries are eyeing the move as a way to 
fill empty municipal coffers in the wake of crushing local and state 
budget deficits, and to standardize their approach to medical 
marijuana outlets.

Other California cities, including Berkeley, San Francisco, Santa 
Cruz and Los Angeles, have all discussed a tax on medical marijuana 
or have plans to pursue a tax.

"It's just smart economics," said San Francisco Supervisor Ross 
Mirkarimi. His District 5 includes four of the city's 16 licensed 
outlets; estimates of overall outlets number as many as 40. "It is a 
progressive tax on a widespread practice and a readily accessible product."

California dispensaries generally pay license and registration fees, 
as well as payroll and state sales tax.

The Oakland pot club levy raises an additional $16.80, for a total of 
$18, for every $1,000 of medical marijuana sold by taxing overall 
gross receipts. It could begin generating an additional $294,000 a 
year for the city when it takes effect Jan. 1.

To impose a similar tax, San Francisco would have to create a gross 
receipts tax for pot clubs -- a plan that Mirkarimi said he sees 
coming before supervisors this year.

The board shelved a similar plan 3UKP1/2 years ago, he said. But it 
was encouraged to dust off the legislation because the Obama 
administration announced that federal agencies would not continue 
raids in states where the use of medical marijuana has been 
legalized. Such raids were actively pursued during the presidency of 
George W. Bush.

The new stance opened up the idea of a tax for other cities, as well. 
Los Angeles City Council members brought forth a motion July 15 to 
explore a tax on legal medical marijuana sales.

"A tax on medical marijuana could enable the city to continue 
providing services we might otherwise have to cut," Councilwoman 
Janice Hahn told reporters.

But hurdles remain before the measure can advance, including the need 
for a permanent ordinance regulating dispensaries, expected to be 
finalized in October, officials said.

An estimated 600 to 800 dispensaries operate in Los Angeles in 
addition to the 186 that were registered before a 2007 moratorium.

Berkeley council members also have discussed a motion similar to 
Oakland's. But the idea "just hadn't crystallized," said 
Councilmember Kriss Worthington, whose District 7 includes a 
dispensary on Telegraph Avenue.

Likewise, Santa Cruz lawmakers have been receptive to a tax on 
dispensaries but have no formal plans, Councilmember Mike Rotkin said.

He called the tax a "no-brainer" even though the Santa Cruz City 
Council is on the verge of approving a temporary freeze on marijuana 
clubs in the city.

Two clubs are now licensed to operate in Santa Cruz. A few more might 
be acceptable in the future, but Santa Cruz doesn't want to become 
the pot center for the area, Rotkin said.

But having so few clubs would minimize the revenue a tax could 
generate, he said.

"The tax is just an additional benefit," Rotkin said. It shows 
support for medical marijuana, he said.

"And anything that brings back more money to the city will be 
attractive," he said, "even if it's a small amount."

On the state level, Assemblyman Tom Ammiano, D-San Francisco, 
introduced a bill this year to legalize and tax marijuana. The bill 
could generate nearly $1.4 billion in revenue for the cash-strapped 
state, according to an analysis by California tax officials.

In addition, a group of California criminal defense attorneys 
submitted a pot legalization measure to the state Attorney General's 
Office. The "Tax, Regulate and Control Cannabis Act" needs 443,000 
signatures to be included on the November 2010 ballot. The bill is 
backed by Oakland dispensary operator Richard Lee.

The legislation would not completely resolve the federal-state 
stalemate over marijuana, which the nation's drug czar, Gil 
Kerlikowske, said the federal government will not support legalizing. 
Kerlikowske, director of the White House's Office of National Drug 
Control Policy, made the comments Wednesday in Fresno, where agents 
seized $1.26 billion worth of pot plants and arrested 82 people in 10 
days, according to the Fresno Bee newspaper.

Nationwide, police arrested a record 872,721 people for marijuana 
violations in 2007, according to the FBI's annual Uniform Crime Report.

Worthington applauded Oakland for being the first city to pass the 
medical marijuana dispensary sales tax. The motion to tax Berkeley's 
three dispensaries would have to wait until the 2010 election because 
running a special vote for one measure is too expensive, Worthington said.

He predicted widespread acceptance for a similar measure among 
Berkeley voters judging by their support for past legislation that 
eased marijuana laws and the perception that the "war against drugs 
is a waste of time."
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MAP posted-by: Jay Bergstrom