Oakland Considers Marijuana Tax

A different kind of green could help the cash-strapped city of Oakland get out of the red.

Oakland’s marijuana clubs rang up nearly $20 million in sales last year and pot club operators are lining up behind the idea of a marijuana tax.

“This measure imposes a 1.8 percent gross receipts tax on the four licensed medical cannabis dispensaries in Oakland,” dispensary operator Steve DeAngelo said.

If it passes, Oakland would be the first city in the country to directly tax marijuana sales — and there is not an ounce of controversy surrounding it.

Club operators like Richard Lee actually lobbied to put the tax on the ballot.

“We do see it as one more step toward legitimizing the cannabis industry,” Lee said.

Dispensaries now pay a $1.20 in city taxes for very $1,000 in pot sold. The new law would raise that tax to $18.

But marijuana sales appear to be recession proof and club operators say they can afford the new tax.

“The market for cannabis is so strong that we’ll be able to absorb the cost,” Lee said.

The marijuana tax could generate at least $400,000 annually. The Oakland City Council is banking on that tax and three other measures passing this July. If they do not, Oakland faces millions more in local cuts.

Lawyer James Anthony wrote the tax law on behalf of the dispensaries.

“It’s really about local government and local needs and providing access to medicine for patients in a way that works for the community and for the city,” Anthony said.

For Councilwoman Rebecca Kaplan, it is about saving jobs in dire economic times.

“That means five or six police officers depending on how senior they are and how much they’re paid,” Kaplan said.

The clubs that could be paying more, say there is no plan to pass the added expense on to the customers.

“We want to demonstrate to our neighbors that we are good citizens; citizens pay taxes, criminals don’t,” DeAngelo said.

The marijuana tax is one of four measures on the Oakland ballot next month.

LINK: Watch streaming video of the Oakland City Council meeting beginning at 5 p.m.

LINK: Information about ballot measures for July 21 election (PDF)

– Article from ABC News on June 30, 2009

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