California Collects $100 Million In Marijuana Sales Taxes

By Steve Elliott
From http://www.tokeofthetown.com/

Photo: The Baltimore Spectator

​California is collecting between $50 million and $100 million a year in sales taxes from medical marijuana, according to the California Board of Equalization, confirming an estimate previously published in an economic analysis by California NORML.

The numbers were also independently confirmed by patient advocacy group Americans for Safe Access.

The state's retail market for medical marijuana has surpassed $1 billion per year, according to California NORML estimates, with a total adult use market of $6 billion.

An initiative to legalize and tax cannabis for adult use will be on this November's ballot in the Golden State.

Marijuana opponents, led by Los Angeles County District Attorney Steve Cooley, have tried to choke off the state's lucrative medical marijuana market by claiming that all marijuana sales are illegal.

The stand stands to lose tens of millions of dollars in sales tax revenues and millions more in enforcement costs if Southern California's dispensaries are closed, according to Cal NORML Director Dale Gieringer.

"Marijuana prohibition is a losing proposition for California's taxpayers," Gieringer said. "On one hand it costs the state to arrest, prosecute, and imprison marijuana offenders, and on the other it deprives the state of valuable tax revenues."

Adult use legalization could net the state some $1.4 billion in revenues, according to California's Legislative Analyst's Office, or more than $1.2 billion by California NORML's estimate.

Forget Taxing Marijuana; The Real Money's In Cocaine

From: http://www.npr.org/

Different strains of medical marijuana at Coffeeshop Blue Sky in Oakland, California. (Justin Sullivan/Getty Images)

By Jacob Goldstein

A Harvard economist has estimated how much money states would raise by legalizing and taxing marijuana and cocaine.

In a podcast a while back, Harvard's Jeffrey Miron told us that his estimates for what California would bring in from taxing marijuana are much smaller than some of the numbers that are floating around out there (including a $1.4 billion estimate from state officials).

Since that interview, Miron has come out with a paper estimating, among other things, potential tax revenues from cocaine and marijuana.

It turns out the big tax money is in cocaine.

Sure, legalizing marijuana is highly unlikely and legalizing cocaine isn't even on the table in mainstream politics. Still, it's interesting to know what the numbers would be -- particularly when they're coming from a Harvard economist.

Here's a table that shows Miron's estimates for the annual tax revenues each state would get from marijuana and cocaine. (The figures are in millions; for more details, see the explanation and links after the table.)

State	Marijuana	Cocaine
Alabama	25.59	80.54
Alaska	6.53	16.28
Arizona	41.91	177.67
Arkansas	19.87	54.49
California	201.74	767.73
Colorado	46.97	133.74
Connecticut	22.57	72.53
Delaware	6.07	18.76
Florida	142.05	362.34
Georgia	86.75	213.96
Hawaii	10.09	21.59
Idaho	11.73	22.66
Illinois	83.98	263.93
Indiana	43.44	120.04
Iowa	18.72	45.94
Kansas	16.69	53.95
Kentucky	28.05	77.79
Louisiana	30.02	97.43
Maine	6.64	25.46
Maryland	37.68	113.79
Massachusetts	44.94	167
Michigan	69.04	174.55
Minnesota	45.43	102.31
Mississippi	19.67	41.17
Missouri	54.99	111.28
Montana	7.94	19.29
Nebraska	13.87	29.13
Nevada	13.97	53.19
New Hampshire	9.03	29.18
New Jersey	74.6	140.31
New Mexico	11.92	47.42
New York	136.81	464.05
North Carolina	87.88	191.04
North Dakota	4.02	9.54
Ohio	88.7	248.79
Oklahoma	29.23	58.23
Oregon	24.09	76.88
Pennsylvania	73.73	211.85
Rhode Island	7.75	37.12
South Carolina	26.29	79.71
South Dakota	7.28	11.96
Tennessee	39.94	146.9
Texas	270.39	483.02
Utah	16.34	53.16
Vermont	3.67	15.86
Virginia	53.35	175.63
Washington	35.76	143.55
West Virginia	8.97	36.65
Wisconsin	61.12	114.16
Wyoming	3.72	11.26
DC	4.82	25.94
Total	2,138.47	6,234.11

On top of state revenues, Miron estimates that a federal taxes would amount to $4.28 billion for marijuana and $12.47 billion for cocaine.

Miron figures taxes on the drugs would be comparable to taxes on alcohol and tobacco. His estimates for how many people in each state use marijuana and cocaine are based on a government survey. (He notes that the number of users would likely rise if the drugs were legalized, but his estimates don't account for this.) He estimates that if marijuana and cocaine were legalized, their prices would fall by 50% and 80%, respectively. The research was funded by the Criminal Justice Policy Foundation; here's the foundation's take on drug policy.

categories: Drugs

Chronic City: L.A.'s Marijuana Dispensary Ban Could Cost City Millions

By Steve Elliott

Los Angeles' proposed medical marijuana ordinance -- which would ban the sale of pot at dispensaries -- could cost the city $36 million to $74 million in lost sales tax, according to a marijuana advocacy group.

Photo by lavocado, Wikimedia Commons

Open for business on L.A.'s Ventura Boulevard... but for how long?

​Dale Gieringer, coordinator for the California chapter of the National Organization for the Reform of Marijuana Laws (NORML), said the proposed ordinance, supported by L.A. District Attorney Steve Cooley, would "effectively shut down the city's marijuana distribution system by banning all sales of marijuana and sharply curtailing collectives' ability to grow and obtain medicine."

No other city or county in California has regulated collectives while banning sales, according to NORML.

Under the proposed ordinance, also prominently backed by L.A. City Attorney Carmen Trutanich, only nonprofit medical marijuana collectives -- groups of qualified patients with physicians' recommendations and their primary caregivers -- would be allowed to cultivate the herb to relieve the symptoms of serious illnesses.

NORML.org

Dr. Dale Gieringer, California NORML: L.A. dispensary ban "Ill-conceived"

​"Los Angeles would be foolish to pass this unworkable, ill-conceived ordinance," Gieringer said. "Not only would it cost $36 to $74 million in lost sales taxes and thousands of jobs, but the city can expect serious legal challenges in the courts. The city would be better advised to adopt a system of licensed regulation and taxes, which has proven successful elsewhere in the state."

In Oakland, considered by many a statewide model for the orderly regulation of medical marijuana dispensaries, voters recently passed, with 80 percent of the vote, a special tax on dispensary sales that is expected to put millions of dollars into city coffers. Cities that NORML lauds as having "successful dispensary regulations" also include San Francisco and West Hollywood. According to the pro-pot organization, these city governments are already collecting millions in taxes and license fees from dispensaries.

A survey by California NORML found the dispensaries pay an average of $82,000 in sales tax. At this rate, some $74 million per year in sales tax would be generated if Los Angeles has 900 dispensaries.

According to NORML, other cities and counties that regulate dispensaries allow them to sell to their members as nonprofit collectives as long as they pay sales tax. NORML estimates that there are 100,000 to 200,000 medical marijuana patients in the Los Angeles area, generating between $400 million and $800 million annually in retail sales.

Under the proposed ordinance, which has come under heavy criticism from the medical marijuana community, over-the-counter sales of pot would be outlawed. The collectives would have to be at least 1,000 feet from other collectives, schools, playgrounds, child care facilities, religious institutions, public libraries, public parks, hospitals, and rehab centers.

The normal committee hearing process is being bypassed so that the L.A. city council can fast-track the vote on the hastily written measure as soon as Nov. 3.

There are an estimated 800 to 1,000 marijuana dispensaries in L.A. County. A judge recently ruled the city's temporary moratorium banning new dispensaries was invalid.

NORML said the proposed ordinance would hamper the distribution of medical marijuana in Los Angeles by limiting collectives to a single, 100-plant garden, meaning each dispensary could only serve a handful of members. This would require tens of thousands of collectives and growing operations throughout the city, the pro-pot organization said. According to the group, nothing in state law authorizes such limitations. Most collectives serve hundreds or thousands of members and draw from many gardens.

NORML also objects to a provision in the ordinance that would ban marijuana extracts and edibles, which enable many patients to ingest the herb without smoking it. Oral preparations are especially important for patients who want to avoid the possible respiratory hazards of smoking.

Patient advocates are expected to sue if the restrictive proposed ordinance is passed, on the grounds that it would limit patients' rights to collectively cultivate and obtain medicine, as guaranteed under Proposition 215 and Senate Bill 420.

Last week, a Mason-Dixon poll found that 77 percent of L.A. residents favor regulating marijuana dispensaries rather than banning them.

Oakland, California, passes landmark marijuana tax

• Story Highlights
• 80% of voters choose to impose tax on Oakland's medical marijuana facilities
  
• Oakland, California, becomes first U.S. city to impose such a tax
  
• Cannabis club leader says he supported effort; he'll owe about $350,000 next year
  
• People opposed to medical marijuana facilities say tax sends wrong message
  

OAKLAND, California (CNN) -- Oakland's bid to become the first U.S. city to tax proceeds on medical marijuana passed Tuesday by a landslide vote.

About 80 percent of people voting in the Oakland election approved the new medical marijuana tax.

About 80 percent of voters chose to impose the tax on Oakland's medical marijuana facilities, according to the Alameda County Registrar of Voters.

Some celebrated the news at Oaksterdam University by hand-rolling large marijuana cigarettes or stuffing cannabis into pipes. The school trains students for work in the medical marijuana industry.

"It is important because the city of Oakland is facing a massive deficit like many jurisdictions in California," said Steve DeAngelo, a leader of one of the city's cannabis clubs. "And we decided to step up to the plate and make a contribution to the city in a time of need."

DeAngelo, one of the people who led the effort to get the tax approved, said his business will now have to pay more than $350,000 from the new tax next year. Watch report from CNN's Dan Simon »

Oakland's City Council was also behind the move.

"Given that the medical cannabis dispensaries are something that was legalized in California, why not have revenue from it?" said councilwoman Rebecca Kaplan.

There was no formal opposition to the effort, but some drug fighters say the tax sends the wrong message.

"The taxation of a federally unlawful drug is just not something that the community should accept," said Paul Chabot of the Coalition for a Drug Free California. "With the state in dire straits in finances and the country looking for ways to pay down debt, looking at illegal drugs is the absolute wrong thing to do."

The measure, passed in special mail-in election Tuesday, imposes a 1.8 percent gross receipts tax on the four licensed medical cannabis dispensaries in Oakland.

These facilities would have to pay about $18 in taxes for every 1,000 in marijuana sales.

Chronic City: To Tax Pot, Or Not? Oakland Votes Tuesday

By Steve Elliott

Monday, Jul. 20 2009 @ 3:59PM

Photo: chron.ron

The color of money

Mail-in voting closes Tuesday on Measure F, a new ordinance in Oakland which would impose a special tax on sales of medical marijuana in the city's dispensaries. The measure would make Oakland the first city in the United States to have a business tax category for marijuana merchants.

Dispensaries have already been paying a rate of $1.20 per $1,000 of gross receipts. Measure F would create a separate category for marijuana sellers, at a rate of $18 per $1,000 of sales. Sales taxes is already assessed on purchases.

Many activists see the proposed ordinance as an incremental step toward complete legalization. After all, once government bean counters associate the marijuana business with a positive revenue stream, they're likely going to think in much more favorable terms about the herb -- and be a lot less inclined to crack down on dispensaries.

The ordinance would create a new business tax category in Oakland for legal marijuana merchants (of which Oakland currently has only four), and would likely bring the cash-strapped city hundreds of thousands of dollars a year in additional revenue. Oakland City Auditor Courtney Ruby estimates initial revenues from the proposed ordinance at $294,000 annually.

Councilwoman Rebecca Kaplan said she believes the actual take could be closer to $1 million. The city's four dispensaries report that they took in $19.7 million in the last fiscal year.

"I don't think it's a turning point... but it starts the ball rolling," Oakland City Attorney John Russo told the San Francisco Chronicle. "As cities start taxing pot and making money, other government entities are going to start asking: 'Why aren't we getting in on this revenue stream?'"

Local marijuana dispensaries (along with community groups and even local police) almost unanimously support the new tax, seeing it as a way to further legitimize their businesses. And it's not hard to understand their desire to be seen as legitimate, in a city that not so long ago was on the front lines of the war between federal and state marijuana laws. In 2001, the U.S. Supreme Court upheld the DEA's shutdown of an Oakland dispensary, finding no "medical necessity" exemptions in federal pot laws.

The issue of marijuana as an law enforcement concern for the Oakland Police Department was clarified by 2004's Measure Z, which instructed city cops to make marijuana laws their lowest priority.

Los Angeles Looking North

It's unlikely that anyone is watching the outcome of Tuesday's vote more closely than members of the Los Angeles City Council. Last week, Councilwoman Janice Hahn called for L.A. to get its share of money from the city's pot dispensaries.

Hahn suggested during last week's city council meeting that a city tax on medical marijuana could provide millions of dollars for Los Angeles, which, like Oakland, is in dire straits financially. Between 400 and 800 pot shops (according to whose estimate you believe) operate in Los Angeles; none are currently taxed. Hahn argues that marijuana should be taxed just like any other commodity.

Pundits believe a pot tax would be a slam-dunk politically, according to the L.A. Weekly. "Although Californians, particularly Angelenos, have repeatedly shown their tolerance for individual marijuana use, I would bet most of us would view such a tariff as just another sin tax -- the kind voters almost routinely pass on cigarettes and liquor," writes Steven Mikulan.

Sacramento's Watching, Too...

You can believe that if Oakland -- and Los Angeles -- start raking in piles of cash from marijuana dispensaries, state legislators will be taking notes.

As reported in this space, Assemblyman Tom Ammiano (D-San Francisco) earlier this year proposed a measure that would legalize and regulate marijuana sales to adults in California.

Particularly in view of the state's economic woes, the proposal has attracted serious interest, especially since last week's report that indicates a marijuana tax could fatten state coffers by as much as $1.4 billion a year.

Opposing View: Unfairly Taxing Patients?

Occasionally lost in the excitement of the rapidly-changing situation on the ground is the fact that the proposed city taxes on marijuana might be seen as unfairly penalizing the sick and dying, since they'll be assessed solely on medical users of the herb.

"Ammiano's [state-wide] bill specifically exempts medical patients from the tax," medical marijuana patient/activist J. Craig Canada told the SF Weekly. "Oakland and Los Angeles, on the other hand, are proposing taking money the sick and dying spend for medicine and giving it to politicians, to balance the budget."

Canada, of Santa Cruz, says he's been a medical marijuana patient since 1995, when he became a member of the San Francisco Cannabis Buyers Club a year before Proposition 215 legalized medical marijuana statewide. In 2004, he became the first person in San Bernardino County to have felony cultivation of marijuana charges dismissed on medical grounds.

"It's a regressive tax," Canada said. "The people who use the most marijuana and need the highest potency are the sickest, and probably the poorest. Medicine should not be taxed."

Photo thanks to chron.ron at Gen-Why.com