S.F. Marijuana Dispensaries Annual Sales Estimate: $41 Million


Changing World

‚ÄčIn an unprecedented analysis of sales tax revenue from the sale of medical marijuana at city dispensaries, the San Francisco controller’s office has estimated annual sales of medicinal cannabis at $41 million.

San Francisco’s roughly two dozen licensed collectives must pay the city’s 8.5 percent sales tax rate, coming from California’s 7.25 percent sales tax with a local one percent sales tax going to S.F.’s general fund, and a .25 percent sales tax that goes to other areas like transportation, reports David Downs at the East Bay Express.
Counting the most recent reporting period — which ended with the third quarter of 2011 — a year’s worth of general fund revenue from sales tax on medical marijuana totals “just over 410,000,” said Curt Fuchs, senior economist in the controller’s office, East Bay Express reports.
Since that figure is one percent of sales, that means S.F. dispensaries sold about $41 million worth of marijuana in a year, “which equals a $50 (or about an eighth of an ounce) dispensary purchase for every person in the city,” Downs reports.

Across California, clubs might be selling an estimated $1.9 billion in medical cannabis per year, the Express reports, with Los Angeles along possibly selling an estimated $475 million worth of dispensary cannabis each year.
U.S. Attorneys began a statewide crackdown on California dispensaries in October 2011; that action has since caused the closure of five S.F. dispensaries, as well as the suspension, then reopening, then suspension again of dispensary permitting applications.
If legal medical marijuana is a $1.9 billion industry in California, and the black market is at least as big, Downs reports, that’s a roughly $4 billion a year industry in the Golden State alone.
For comparison purposes, the entire Drug Enforcement Administration budget is $2.4 billion per year. (The total annual federal budget for the Drug War, however, is $15 billion.)