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.