Berkeley May Look To Pot Shops To Solve Budget Woes

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Photo: The Berkeley Clinic

‚ÄčBerkeley is the latest California city facing a budget deficit to cast an acquisitive eye at the healthy revenue stream flowing through medical marijuana dispensaries.

The Berkeley City Council will Tuesday night consider putting a measure on the November ballot to increase the business license tax on its three officially sanctioned marijuana dispensaries. The pot shops currently pay $1.20 per $1,000 of gross receipts, which nets the city about $22,000 a year, reports Frances Dinkelspiel at Berkeleyside.

The proposed ballot measure would increase the tax rate from 0.8 percent to 1.8 percent. Firearms and ammunition businesses, by way of comparison, pay a 15 percent tax rate, private trash haulers pay a 15 percent rate, and private sporting events pay 10 percent.
The three dispensaries earn about $18.5 million a year, according to the Berkeley City Attorney’s office. The new tax would put an additional $330,000 into the city’s coffers. However, Berkeley’s projected budget deficit is a whopping $14.6 million.
All three dispensaries are opposed to the suggested tax increase, and plan to ask the council Tuesday night to postpone discussion to a later date.
“It’s not cigarettes,” said Erik Miller, who manages the Berkeley Patients Care Collective. “It’s not alcohol. It’s not recreation. It’s people’s medicine. I don’t think taxing sick people is the way to raise money.”
Oakland voters last year approved a new 1.8 percent tax on marijuana dispensaries. That tax will garner the city an estimated $1 million a year. Sacramento and San Jose, facing similar budgetary challenges, are considering similar measures.
California residents will vote on a statewide initiative in November which would legalize recreational marijuana use for adults 21 and older. Supports say legalization and taxation would bring more revenues to local government coffers.
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