Medical Marijuana Goes Retail: You Can Tax It

The Wall Street Journal: Retail shops are a sort of second wave of medical marijuana.

California first approved the use of medical marijuana in 1996, but it wasn’t until 2004 that the state approved the creation of distribution centers. Now medical marijuana stores are sprouting like weeds in Los Angeles (sorry); the city council could vote today to limit their number, the WSJ reports.

Hundreds of stores have opened in the past year, and the city now has somewhere around 1,000 marijuana dispensaries. By contrast, San Francisco, which has more rules governing the shops, has about 30.

Earlier this month, voters approved the creation of retail dispensaries in Maine, which has allowed some access to medial marijuana since 1999. Fourteen states now allow some access to medial marijuana, and five allow for retail dispensaries, according to the Associated Press (Colorado, Rhode Island and New Mexico, along with California and Maine).

If retail stores are the second wave, maybe taxation will be the third.

Colorado’s attorney general concluded in a formal opinion issued last week that retail sales of marijuana are subject to state and local sales taxes in most instances. Denver is already gearing up to collect local taxes on medical marijuana, the Denver Post notes. And in Oakland, California, voters earlier this year approved a local tax on medical marijuana sales.

Could taxation go beyond medical use? California is at least considering it. This analysis by a state tax official suggests that a $50 per ounce tax on marijuana could raise between $990 million and $1.4 billion.

While plenty of people remain opposed to full legalization (not to mention medical marijuana), support is growing, the Washington Post noted yesterday. Nationwide, 44% of people favor full legalization, up 13 points since 2000, according to a Gallup poll cited by the WaPo.



  1. Anonymous on

    The power to tax is the power to destroy. It was a tax act that started this mess:
    A tax just empowers bureacrats–the same ones who have been throwing our people in prison for years. Don’t fall for it!

  2. Ian on

    Well said in regards to tobacco! Although, I believe the government pumps quite a lot of subsidies into tobacco farmers to keep their crops in the ground.

  3. Bradson on

    We won’t really know until we’ve lived with full legalization for awhile, but there’s no reason that quality cannabis can’t be abundant and inexpensive in a free market. I’ve grown very good bud in my back yard for next to nothing, and that experience informs my opinion that big time professional growers could certainly do better. I’ve also had very good Mexican bud that was grown outdoors by someone who must have used good farming techniques…it’s black market price was $50/ounce, which shows that it can be done when people who really know what they’re doing grow it in a big way for a mass market.

    From what I’ve read, tobacco is a fussy plant to grow, cure and process but even with taxes it’s still about $15/ounce retail. I’ve never grown tobacco and don’t care to, but it seems possible that cannabis is easier to produce than that poisonous plant.

  4. Jay Dell on

    As we aproach the end of the long hard road to taxation and regulation.The flag only drops as we cross the line ,here it comes legal and safe.

  5. Atlanta Toker on

    At Ease boys, competition will bring the prices in line. Thats not a worry.

  6. Anonymous on

    I do not agree with this person. People like this probably believe in the governmetn wiping their butt too. 15 dollars a ounce? How much are you smoking? If you want the good growers who grow kind bud to stay in business you better realize the prices will not be 15 dollars a ounce, unless you want outdoor mexi crap, or BC commercial garbage. Good kind bud costs money. Its not free, please stay in your moms basement and never come out to be in the real world. Maybe you can get welfare bud from some idiot who feels we can live in a free world where we have no material things and we all smell like petule oil. Maybe he will give you 15 dollar a ouce bud. I for one want to get paid for my hard work that sets you back in your seat and does not make you cough up a lung while you are enjoying my work.

  7. Bradson on

    This is certainly a good start in the movement towards full legalization, but the proposed taxes are really too much. A $50/ounce tax in Cali may work at first because people are used to outrageous black market prices, but even if this means a retail of $100/ounce or so, the black market can easily undercut that price. To really eliminate the black market, the legal price must align with the actual cost of producing the product. That probably means a retail price in the $10-25/ounce range, taxes included. Until then there will likely be a tremendous boom in home growing and kits to make it easy and cheap…similar to kits already on the market for growing other herbs, tomatoes and veggies on the kitchen counter.

    It’s going to be great fun to see how this market evolves as cannabis becomes fully legal and very abundant. I so look forward to it because I, like many others, simply can’t afford it now and still won’t be able to afford it if it remains in the $100s/ounce range when legal. I rely on the generosity of friends for an occasional smoke.