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Marijuana Vendors Lobby To Pay Higher Taxes

by Richard Gonzales


Morning Edition, June 30, 2009 · In today's economy, it's hard to find anyone who really wants to pay higher taxes. That is, unless they happen to be in the business of selling medical marijuana.

In Oakland, Calif., marijuana vendors are actually lobbying for a higher tax on their product.

Take, for example, Richard Lee, the proprietor of the Coffeeshop Blue Sky, where anyone with a doctor's note can buy products much more relaxing than a jolt of java. How about 1/8 ounce of high-grade medical marijuana? That's $40 for the cannabis and $4 in sales tax.

Lee says the sales tax is just the price of doing business.

"My business pays $300,000 a year in sales tax, plus another half-million in payroll taxes — income taxes," Lee says. "So we estimate that all four dispensaries in Oakland pay over a million in sales tax already."

And now, the city of Oakland wants a bigger cut of Lee's action. Right now, medical marijuana dispensaries pay a city tax of $1.20 for every $1,000 they take in. In July, voters will decide whether the dispensaries should pay even more — as much as $18 for every $1,000 in gross receipts.

Lee and other dispensary owners not only support the proposed new taxes, but they're also the ones who brought the idea to city officials in the first place.

"We're basically trying to say that we are like other businesses, you know. We're here to pay taxes, create jobs and improve the community," Lee says.

Councilwoman Rebecca Kaplan says the new tax could generate upward of $1 million annually and would make Oakland the first city in the country to directly tax medical marijuana.

"You know, in these economic times, we're trying to find revenue everywhere we can, and we're trying to keep our senior centers open," she says. "We're trying to keep public safety officials hired and with equipment that works, and so to have someone stepping up and say, 'We're willing to pay more,' it's a pretty beautiful thing."

It's not the first time officials have looked to marijuana to fill their tax coffers. A bill to legalize and tax cannabis statewide has already been introduced in the California Legislature. And state finance officials estimate that legalized pot could bring in about $1.5 billion in new taxes to the cash-strapped state.

Still A Federal Crime

But opponents of medical marijuana aren't convinced. Calvina Fay is the executive director of the Drug Free America Foundation. She says medical marijuana may be legal in California and 12 other states, but its sale is still a federal crime.

"I think it is one more step in creating the illusion that they are operating within the law, what they're doing is OK," Fay says.

Other critics of the tax proposal say the medical marijuana industry is looking for more than legitimacy. Ronald Brooks, the president of the National Narcotic Officers' Associations' Coalition, says the ultimate goal is the legalization of cannabis.

"Their strategy has long been that they just can't go to the voters right now in today's environment and say, 'Legalize marijuana.' But they know there is a growing movement that supports marijuana and, unfortunately, when you start to chip away at our national drug policy, you begin to have people believe that somehow this is safe," Brooks says.

Brooks won't get much argument from Lee. He says the Oakland tax proposal is written so broadly that it would cover anyone involved with growing and selling marijuana should it ever become legal.

"We see it as part of the overall picture of legalization, of changing the attitudes of cannabis. Instead of seeing it as an underground thing that people do to get out of paying taxes, we're trying to make it a regular part of the business of the city," he says.

A recent Field Poll shows that, for the first time, 56 percent of those surveyed in California support legalization of marijuana — and Gov. Arnold Schwarzenegger says he's ready for an open debate on the idea.



Potheads wanting to do their part. I think they were "high" when they said they wanted to pay more taxes.

i think they're just blowing smoke...

This business is recession proof man!!!

By that logic, everyone's employers and/or customers pay their taxes, not them.

Sales tax yes. Other taxes no.

You could make the point that customers do pay all taxes but there are excise taxes that I pay that are not directly paid for by the consumer.

It's "high" time the just made pot legal. Sell it like smokes in a 20 pack and tax it.

It would be a HUGE revenue boost.

Where's Tyler D ?