Some localities not waiting for Prop 19 to tax

Some plans are prohibitive

By Dale Gieringer California NORML

Regardless of whether Prop 19 passes, a growing list of cities are proposing ballot measures to tax medical marijuana sales at ever-escalating rates, as cities look to cash in on revenues from marijuana.

In San Jose, the city council has proposed a ballot measure to impose up to a 10-percent tax on medical marijuana. If approved by voters, that means the city’s dispensaries would be taxed at a whopping 19.25 percent including sales tax.

Oakland began the tax stampede last year by approving a modest 1.8 percent business tax on cannabis. The idea was initiated by the city’s dispensaries, who had proposed a 1.4-percent rate. That was hiked by the city council before being passed along to the voters, who approved it by a lopsided 4–1 margin.

The Berkeley City Council voted to leapfrog Oakland by putting a 2.5 percent medical marijuana tax on the ballot, rejecting patient advocates’ pleas for a more modest rate. The measure also proposes a 10-percent tax on non-medical sales in the event that Prop 19 passes, plus a tax of up to $25 per square foot on medical cannabis production facilities that would be licensed by the city.

Not to be outdone, the Oakland city council approved a ballot measure to hike the city’s tax to 5 percent on medical marijuana and 10 percent on non-medical cannabis, plus an additional 5 percent on the city’s four proposed licensed cultivation facilities. Critics warned that such high taxes would encourage patients to shop elsewhere, such as in San Francisco, where there is no cannabis tax.

Other proposed Nov. 2 ballot tax measures include:

Sacramento: 4 percent medical, 10 percent non-medical;

Richmond: 5 percent medical, 5 percent non-medical;

Long Beach: 5 percent medical, 10 percent non-medical;

Stockton: 2.5 percent medical, 10 percent non-medical.

A few cities, including Redding and Sebastopol, turned down tax proposals.

At the other extreme, Rancho Cordova proposed a prohibitive $600-per-square-foot tax on cannabis cultivation of any kind –- even patients growing for personal use. If approved, the measure is certain to be challenged as an unconstitutional violation of patients’ rights under Prop. 215.

Regardless of the wishes of patients who feel prices are too high, the bandwagon seems destined to gain momentum. This year, State Senator Ronald Calderon (D-Montebello) proposed a bill to tax medical marijuana like cigarettes. The bill wasn’t heard, but the idea is expected to return next year regardless of the outcome of this election.