Katelyn Baker
Well-Known Member
San Diego - San Diego would join several other large California cities that impose local taxes on marijuana businesses if voters approve a proposed November ballot measure that Councilman Mark Kersey will unveil on Monday.
Kersey said the tax, which would start at 8 percent of gross receipts and could rise to 15 percent at council discretion, would help cover costs for code enforcement officers, police and other city workers who monitor and regulate marijuana businesses.
Marijuana advocates and local proprietors didn't immediately condemn the idea, but warned that excessive taxation of legal marijuana would inflate prices and could help foster a more robust black market for the drug.
Opponents of legal marijuana expressed strong opposition to the proposal, citing similar concerns about a larger black market and contending that the government taxing marijuana further legitimizes a harmful drug that remains illegal under federal law.
Kersey's proposal comes with Californians facing a likely November ballot measure that would legalize recreational use of marijuana in addition to medical use, which state voters made legal in 1996.
"With the whole landscape changing, now is probably a good time to have this conversation," said Kersey. "Legalizing recreational use will increase demand, so I think it's likely you'll also see an increased demand for these kinds of city resources to monitor and regulate this industry."
Council President Sherri Lightner agreed.
"Many other California cities are adopting similar taxes on the sale of cannabis in anticipation of the use of recreational marijuana being approved statewide by voters in November," she said. "I believe this is a common sense proposal that will benefit San Diego by generating additional tax revenue that can be used for major city needs such as public safety and infrastructure."
Other cities with local marijuana taxes include Los Angeles, San Jose, Oakland, Sacramento, Long Beach, Berkeley, Palm Springs and several smaller cities. San Jose's tax generated $17 million between 2011 and 2015. San Diego would be the first city in the county to take this step.
The taxes range from 6 percent to 15 percent. They are on top of traditional California sales taxes that legal marijuana businesses have had to pay since 2001, which is 8 percent in the city of San Diego.
The statewide recreational marijuana measure, known as the Adult Use of Marijuana Act, would also impose a 15 percent state tax on retail sales of recreational marijuana.
So if voters approve both the state and local measures, marijuana sales would be subject to a 31 percent tax surcharge at legal recreational dispensaries in the city of San Diego.
That number has raised some eyebrows among the United Medical Marijuana Coalition, which includes the owners of many of the 14 legal dispensaries approved by the city.
"The coalition is currently extremely concerned about the pressure black-market dispensaries and deliveries are putting on city-licensed storefront cooperatives that are abiding by all regulations and bearing the expense that comes with it," said Rachel Laing, a spokeswoman for the group. "The danger is that adding double-digit taxes could further advantage the black-market operators - driving the legal, tax-paying providers out of business. We'll be advocating for an approach that addresses those concerns."
Laing said, however, that the group is optimistic Kersey understands their concerns and will make appropriate adjustments.
"We've had constructive initial conversations with Councilmember Kersey's office about this proposal," Laing said. "As San Diego's only legal, tax-paying cannabis business operators, our members have valuable insight and data that can inform the city's framework for a tax, and thus far we're optimistic they'll take our input into consideration as they craft the ballot measure."
Kersey said he was flexible.
"This is all up for discussion," he said, noting that his proposal will be debated during Monday's meeting of the City Council's Rules Committee and, potentially, a subsequent meeting where the full council could place the measure on the November ballot.
Other marijuana advocates offered similar sentiments to the local coalition.
"There's been a lot of complaints from the industry about the local taxes, but they're popular with voters and they pass at the ballot box," said Ellen Komp, deputy director of the California chapter of the National Organization for the Reform of Marijuana Laws. "There's a point where if you overtax something you're going to encourage the black market. But there's a sweet spot probably where it could be taxed properly."
Lance Rogers, an attorney who has represented local dispensary owners, said his position would depend on how the city plans to spend the new revenue.
"I can see a lot of good uses for these tax dollars, perhaps promoting cannabis tourism in San Diego or addressing substance abuse issues for people addicted to marijuana or who don't consume it responsibly," he said.
Rogers said voters should get a say.
"Additional taxes for marijuana is a controversial subject both within the community and within the industry," he said. "It's definitely an issue that should be discussed and the voters should decide it."
Every local marijuana tax was approved by voters in that city because state law prohibits cities from levying new taxes without voter approval. San Diego's measure would need approval from a simple majority of voters — not two-thirds of voters — because the revenue wouldn't be devoted to a specific purpose.
Scott Chipman, leader of the anti-marijuana group San Diegans for Safe Neighborhoods, said it would be a huge mistake for the city to move forward with a local tax.
"We're 100 percent opposed to anything that represents legalization of marijuana," said Chipman. "The No. 1 effort by all elected officials should be to defeat legalization and educate the public on the harms. The No. 1 role of government is public safety, not tax collection."
Chipman also said the only way the tax could raise enough revenue to pay for all the costs that will come from legalizing marijuana would be to set it so high that the existing black market would dramatically increase in size.
The statewide recreational marijuana measure, which won't officially be on the ballot until signatures gathered by advocates are verified in coming weeks, would eliminate state taxation of medical marijuana dispensaries.
So if voters approve the statewide measure and the Kersey proposal, local recreational marijuana businesses would pay 31 percent in taxes, but local medical marijuana business would pay nothing.
If voters reject the statewide measure but approve the Kersey proposal, then taxes would increase on local medical marijuana businesses.
In addition to dispensaries, Kersey's proposal would apply to delivery services and businesses focused on marijuana cultivation.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: San Diego May Levy Local Marijuana Tax
Author: David Garrick
Contact: (800) 533-8830
Photo Credit: John Gibbins
Website: The San Diego Union-Tribune
Kersey said the tax, which would start at 8 percent of gross receipts and could rise to 15 percent at council discretion, would help cover costs for code enforcement officers, police and other city workers who monitor and regulate marijuana businesses.
Marijuana advocates and local proprietors didn't immediately condemn the idea, but warned that excessive taxation of legal marijuana would inflate prices and could help foster a more robust black market for the drug.
Opponents of legal marijuana expressed strong opposition to the proposal, citing similar concerns about a larger black market and contending that the government taxing marijuana further legitimizes a harmful drug that remains illegal under federal law.
Kersey's proposal comes with Californians facing a likely November ballot measure that would legalize recreational use of marijuana in addition to medical use, which state voters made legal in 1996.
"With the whole landscape changing, now is probably a good time to have this conversation," said Kersey. "Legalizing recreational use will increase demand, so I think it's likely you'll also see an increased demand for these kinds of city resources to monitor and regulate this industry."
Council President Sherri Lightner agreed.
"Many other California cities are adopting similar taxes on the sale of cannabis in anticipation of the use of recreational marijuana being approved statewide by voters in November," she said. "I believe this is a common sense proposal that will benefit San Diego by generating additional tax revenue that can be used for major city needs such as public safety and infrastructure."
Other cities with local marijuana taxes include Los Angeles, San Jose, Oakland, Sacramento, Long Beach, Berkeley, Palm Springs and several smaller cities. San Jose's tax generated $17 million between 2011 and 2015. San Diego would be the first city in the county to take this step.
The taxes range from 6 percent to 15 percent. They are on top of traditional California sales taxes that legal marijuana businesses have had to pay since 2001, which is 8 percent in the city of San Diego.
The statewide recreational marijuana measure, known as the Adult Use of Marijuana Act, would also impose a 15 percent state tax on retail sales of recreational marijuana.
So if voters approve both the state and local measures, marijuana sales would be subject to a 31 percent tax surcharge at legal recreational dispensaries in the city of San Diego.
That number has raised some eyebrows among the United Medical Marijuana Coalition, which includes the owners of many of the 14 legal dispensaries approved by the city.
"The coalition is currently extremely concerned about the pressure black-market dispensaries and deliveries are putting on city-licensed storefront cooperatives that are abiding by all regulations and bearing the expense that comes with it," said Rachel Laing, a spokeswoman for the group. "The danger is that adding double-digit taxes could further advantage the black-market operators - driving the legal, tax-paying providers out of business. We'll be advocating for an approach that addresses those concerns."
Laing said, however, that the group is optimistic Kersey understands their concerns and will make appropriate adjustments.
"We've had constructive initial conversations with Councilmember Kersey's office about this proposal," Laing said. "As San Diego's only legal, tax-paying cannabis business operators, our members have valuable insight and data that can inform the city's framework for a tax, and thus far we're optimistic they'll take our input into consideration as they craft the ballot measure."
Kersey said he was flexible.
"This is all up for discussion," he said, noting that his proposal will be debated during Monday's meeting of the City Council's Rules Committee and, potentially, a subsequent meeting where the full council could place the measure on the November ballot.
Other marijuana advocates offered similar sentiments to the local coalition.
"There's been a lot of complaints from the industry about the local taxes, but they're popular with voters and they pass at the ballot box," said Ellen Komp, deputy director of the California chapter of the National Organization for the Reform of Marijuana Laws. "There's a point where if you overtax something you're going to encourage the black market. But there's a sweet spot probably where it could be taxed properly."
Lance Rogers, an attorney who has represented local dispensary owners, said his position would depend on how the city plans to spend the new revenue.
"I can see a lot of good uses for these tax dollars, perhaps promoting cannabis tourism in San Diego or addressing substance abuse issues for people addicted to marijuana or who don't consume it responsibly," he said.
Rogers said voters should get a say.
"Additional taxes for marijuana is a controversial subject both within the community and within the industry," he said. "It's definitely an issue that should be discussed and the voters should decide it."
Every local marijuana tax was approved by voters in that city because state law prohibits cities from levying new taxes without voter approval. San Diego's measure would need approval from a simple majority of voters — not two-thirds of voters — because the revenue wouldn't be devoted to a specific purpose.
Scott Chipman, leader of the anti-marijuana group San Diegans for Safe Neighborhoods, said it would be a huge mistake for the city to move forward with a local tax.
"We're 100 percent opposed to anything that represents legalization of marijuana," said Chipman. "The No. 1 effort by all elected officials should be to defeat legalization and educate the public on the harms. The No. 1 role of government is public safety, not tax collection."
Chipman also said the only way the tax could raise enough revenue to pay for all the costs that will come from legalizing marijuana would be to set it so high that the existing black market would dramatically increase in size.
The statewide recreational marijuana measure, which won't officially be on the ballot until signatures gathered by advocates are verified in coming weeks, would eliminate state taxation of medical marijuana dispensaries.
So if voters approve the statewide measure and the Kersey proposal, local recreational marijuana businesses would pay 31 percent in taxes, but local medical marijuana business would pay nothing.
If voters reject the statewide measure but approve the Kersey proposal, then taxes would increase on local medical marijuana businesses.
In addition to dispensaries, Kersey's proposal would apply to delivery services and businesses focused on marijuana cultivation.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: San Diego May Levy Local Marijuana Tax
Author: David Garrick
Contact: (800) 533-8830
Photo Credit: John Gibbins
Website: The San Diego Union-Tribune
