By Paul Armentano
All told, voters by wide margins endorsed citywide medi-tax ordinances in Albany, Berkeley, La Puente, Oakland, Rancho Cordova, Richmond, Sacramento, San Jose, and Stockton.
Albany voters decided 83 percent to 17 percent in favor of Measure Q, which allows city officials to impose a $25 per-square-foot tax on nonprofit medical cannabis operations. Under the measure, for-profit ventures would be taxed at a rate of 2.5 percent of gross receipts.
In Berkeley, voters approved Measure S, which enacts a 2.5 percent business license tax on medical marijuana operators. The new fee will be imposed in addition to the Berkeley’s existing business tax, which applies to all businesses that operate within the municipal limits.
La Puente voters backed Measure N, authorizing city officials to collect local taxes on existing medical marijuana dispensaries at a rate of $100 per square foot of business space or 10 percent per $1,000 of gross receipts. City officials have estimated that the imposition of the new taxes could generate as much as $3 million in annual city revenue.
Oakland voters for the second time in so many years decided in favor of a local ballot measure (Measure V), which authorizes specific taxes on the retail sale of medical cannabis. Over 70 percent of voters backed the proposal, which imposes a new tax upon licensed medi-pot dispensaries of $50 for every $1,000 in gross receipts. The new five percent tax rate is nearly three times the supplemental sales tax rate already imposed on local dispensaries and could add more than $1 million to Oakland's general fund, according to city council members.
Rancho Cordova voters decided 56 percent to 44 percent in favor of the highly controversial Measure O. Unlike most other city-wide ballot proposals, which impose taxation on commercial production or retail sales of medical cannabis, Measure O affects personal home grows. The proposal impose taxes of $600 to $900 per square foot on personal medical marijuana grows. The tax means that medical marijuana consumers who cultivate their own cannabis in a five-foot by five-foot indoor space could be required to pay an annual local levy of $15,000. While it is possible (read: likely) that this exorbitant fee will be eventually struck down by the courts as an undue infringement upon patients’ rights under Prop. 215, it could be months or years before such a clarification by the courts is made.
In Richmond, voters overwhelmingly approved Measure V, which imposes a five percent tax on local medical marijuana dispensaries, up to three of which are allowed by city ordinance. Revenue raised by the pot tax is slated to go toward municipal services like fire and police departments, which have suffered from statewide budget cuts.
Seventy-one percent of Sacramento voters approved Measure C, which enables city officials to impose a new business tax on medical marijuana dispensaries. The specific tax rate will be determined by city officials, but may be as high as four percent of businesses’ annual gross receipts.
In San Jose, nearly eight out of ten voters endorsed Measure U, which allows city officials to levy an additional ten percent tax on the area’s existing medical cannabis dispensaries. According to news reports, The San Jose City Council will hold a study session in mid-December to determine the precise tax rate.
Finally, in Stockton, voters endorsed Measure I, which imposes a separate 2.5 percent business tax on medical cannabis businesses.
Patient advocacy groups like Americans For Safe Access oppose the implementation of such medi-tax laws, noting that they could unduly raise the price of medical cannabis and ultimately limit patients’ access. Nonetheless, it is hardly surprising to see a majority of Californians, at a time of record budget deficits, voting to impose additional taxes upon a minority subset of their community.
In short, the success of these tax measures at the ballot box is yet further evidence that with or without Prop. 19, more and more city governments – including Los Angeles -- are going to be looking at new ways to raise revenue from California’s burgeoning cannabis industry and its consumers. Industry insiders and those they represent, patients especially, would be best advised to begin playing an active role in local politics – or else risk suffering the consequences of unreasonable taxation without representation.