California Cities Taxing Pot Dispensaries To Trim Budget Deficits


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​On July 13, the city council of Berkeley, California asked voters to approve a 2.5 percent tax on the city’s medical marijuana dispensaries, three of which grossed a total of $19 million last year.

“This is huge,” said Mayor Tom Bates. According to the mayor, the tax will help close a $16.2 million budget gap, but it’ll do more than that, report Christopher Palmeri and Michael Marois at Business Week.
It also makes sure that as marijuana sales go mainstream, the local community — not outside business interests — benefits. “We don’t want to have Philip Morris coming in here, sucking up all the money,” Bates said.


​On the same night that Berkeley officials acted, the Sacramento City Council passed a similar measure, and Long Beach adopted one on July 6.
These cities could be just the beginning if California voters approve Prop 19 in November. The initiative would make it legal to possess an ounce or less of marijuana for recreational use. The measure would also allow cities to regulate and tax pot.
Taxing cannabis sales is a growing trend as fiscally challenged cities acknowledge the public’s growing acceptance of marijuana use, according to Business Week.
Denver has generated $1.2 million in marijuana taxes since December, when the city began collecting sales taxes from its 256 cannabis dispensaries. Washington, D.C., approved a six percent tax on June 15, on what will eventually be five dispensaries.
Marijuana advocates are conflicted, Business Week reports. While they’d like to see more respectability for cannabis, at the same time they don’t want to pay more for it.
“We’re struggling with this,” said Kris Hermes at Americans for Safe Access (ASA), an Oakland-based patient advocacy group. “We know local governments are cash-strapped and looking for creative ways to raise revenue.”
Others, though, see taxation as a real sign of progress.
“Citizens pay taxes; criminals don’t,” said Steve DeAngelo, executive director of Harborside Health Center, a big marijuana dispensary in Oakland that campaigned for — and won — a marijuana tax in that city last year.
“We should step up to the plate and pay our fair share,” DeAngelo said.