LAST YEAR, Oakland became the first U.S. city to create a specific tax on medicinal marijuana providers. Measure F raised the tax on dispensaries from $1.20 per $1,000 in business sales to $18 per $1,000. The increase on more than $17 million in gross receipts was expected to bring in an extra $294,000 per year to the city's cash-starved general fund.
Now Oakland city officials are asking voters for permission to nearly triple the tax on medical cannabis businesses to $50 per $1,000 in sales. Richmond and Berkeley are attempting to follow in Oakland's footsteps rushing to cash in on the booming medicinal marijuana business with pot ballot tax measures of their own in November.
Pot fever has even caught on in Albany, which is likewise seeking to pass a marijuana business tax even though there isn't a single marijuana dispensary within the city limits. Officials say they want to be ready just in case.
Measures V in Oakland, S in Berkeley, Q in Albany and V in Richmond would also allow those cities to collect taxes on recreational sales should voters approve Proposition 19.
We endorse all four measures. Though there are certainly a number of Californians who remain opposed to marijuana usage for any purposes, the fact is it is legal in our state to cultivate and sell marijuana for medicinal use. It only makes sense, therefore, for cities facing serious financial challenges to tax and regulate cannabis businesses as they do all other legitimate businesses.
However, our endorsement of these local measures should not be mistaken for support of Prop. 19. This newspaper opposes the state measure to legalize recreational marijuana use because we believe it is a federal, rather than a state, issue. Though there are strong arguments for legalization, creating a patchwork of state laws is not the answer.
The four local ballot measures above deal solely with setting a tax structure for local cannabis businesses.
All of the measures require majority approval:
Oakland Measure V: Would increase the business tax rate for "Medical Cannabis Businesses" from $18 per $1,000 of gross receipts to $50 per $1,000 of gross receipts. It would also create a new "Non-Medical Cannabis Business Tax" of $100 per $1,000 of gross receipts. Recommendation: Yes.
Albany Measure Q: Would tax for-profit marijuana dispensaries at $25 per $1,000 of gross receipts. Nonprofit marijuana dispensaries would pay $25 per square foot. Recommendation: Yes.
Richmond Measure V: Would require anyone engaged in the medical marijuana business to pay a general business license tax of 5 percent of gross receipts. Recommendation: Yes.
Berkeley Measure S: Would authorize a tax on medical cannabis businesses not exceeding $25 per $1,000 of gross receipts phased in over two years. Nonprofit medical cannabis businesses would pay $25 per square foot for the first 3,000 square feet and $10 for each square foot thereafter. Nonmedical cannabis businesses would pay $100 per $1,000 of gross receipts. Recommendation: Yes.
A fifth cannabis regulation measure in Berkeley, Measure T, has generated debate.
Measure T would allow residential medical cannabis collectives to use the lesser of 200 square feet or 25 percent of a building for cultivation. It would also direct the city to issue permits for larger scale growers in the industrial district. The city would increase the number of dispensaries from three to four. They would be required to be at least 600 feet from public and private schools.
Opponents allege that Measure T would allow unlimited expansion of Berkeley's marijuana industry. That is an exaggeration. The council wisely cut back its original plan to allow 10 larger growers. Furthermore, only one dispensary would be added -- a modest proposal overall. Recommendation: Yes.