Burning Issue: L.A. Times Passes on City Medical Marijuana Tax

By Dennis Romero Mon., Feb. 21 2011 at 7:09 AM

Green for parks and libraries?

And you say we're the party poopers when it comes to coverage of L.A.'s marijuana scene?

Take a look at Sunday's Los Angeles Times. The paper's dead against the March 8 ballot measure that would let the city tax medical pot shops. Just say no, argues the Times. Why?

Whew. Hold on to your bongs, stoners. The paper calls the state's medical-weed business ...

... a "quasi-legal industry."

That's right. The Times states:

"Getting in bed with a quasi-legal industry has drawbacks. If city government became reliant on tax revenue from medical marijuana sellers, city officials would be less likely to pass ordinances restricting their operations and police would be less inclined to raid their establishments to check whether they're really running on a nonprofit basis. A decrease in such scrutiny would encourage more illegal for-profit dispensaries, which draw other kinds of crime."

Again, that's the Times, not us. Send your hate email their way.

The paper notes that Jerry Brown, as attorney general, argued that state law says medical marijuana dispensaries must be nonprofit and supplied by members (and not by cartels and gang-driven grow houses).

Now, say what you will about pot shops, but you know and I know that grandma isn't sharing her backyard bud with friends at a nonprofit rate here.

What's more, many dispensaries, if not most, refuse to even register with the IRS as nonprofits for fear of running afoul of federal law that says there's no such thing as medical weed.

The L.A. City Attorney says taxing pot shops, then, would be illegal, particularly if they're running as for-profits.

What do you think? Yes to taxing weed? Measure M would let the city take home $50 for every $1,000 in pot-shop sales.

Tags:

dispensaries, Los Angeles Times, Measure M, medical marijuana, pot shops

We Recommend

Face the Facts

Prohibition is a failed public policy.

Legalizing cannabis turns a money pool controlled by cartels into jobs and a revenue stream that benefits all citizens.

Guest

Mr. Romero makes the common mistake of confusing nonprofit corporate operation (how the dispensary is organized under California corporations code) with IRS nonprofit status (which is not applicable to dispensaries anyway).

EgadsNo

If there was no restriction- the price of marijuana would be around 10 dollars an ounce to produce, according to a RAND study. Marijuana is not hard to grow- or process, there is plenty of room for taxes and it still being a reasonable cost without all of the ludicrous restrictions put in place by all the chicken littles crying the sky is falling.

Brandt Hardin

I feel this is a step in the right direction toward making Pot work to help our damaged economy. Marijuana is the safest drug with actual benefits for the user as opposed to alcohol which is dangerous, causes addiction, birth defects, and affects literally every organ in the body. Groups are organizing all over the country to speak their minds on reforming pot laws. I drew up a very cool poster for the cause which you can check out on my artist’s blog at http://dregstudiosart.blogspot... Drop in and let me know what you think!

Liz Delacy

Dispensaries only accept cash and they don't charge sales tax. Prescriptions are not taxed in California and can be deducted from your income. The argument that the $50 fee per $1000 sold would raise the prices is ludicrous. The Times article suggests that most dispensaries are actually making quite a bit in profit. That means the prices are not based on the production costs, rather pot sells at the market rate. This means if dispensaries were to try to pass this cost on to their customers, the customers would be able to purchase their weed for less on the black market. If dispensaries are making a lot of money, as I think we all can agree they are, they will not want to alienate their customers. They will absorb the cost and keep the prices the same so that they will remain competitive with illegal dealers.

I support this tax. I think it's a great idea.

jennahef

Dispensaries do NOT only accept cash. Many accept credit cards & they do charge sales tax. Perhaps you should expand your dispensary experience before you make generalizations.

Fidor

Many dispensaries accept other forms of payment (credit cards) and do charge sales tax.

Timothy Weld

My reply was to Liz not Fidor

Timothy Weld

Sounds like you go to nothing but illegal collectives. Try going to a one that does things right by the rules.

Timothy Weld

All legitimate, legal medical cannabis collectives have the patients pay the 9.75 percent sales tax already. To have the patients pay an additional 5 percent "sin tax" for their medicine is disgusting.

The money allotted from the tax would not go to help providing safe access for patients. It will not go to creating a workable ordinance, for patients and collective operators to work within the law. It will go to frivolous things like the new (and useless) football stadium and feed the bloated salaries of our city officials.

If the city had created a workable cannabis ordinance, controlled the explosion of rogue collectives, and helped provide safe access to patients, maybe a 5 percent tax would be acceptable. But, all they have done is convolute the issue, drag it out and make safe access harder in the city of Los Angeles.

A medical cannabis tax is a punishment to patients who need their medicine.

paultakeda

It's $50 per $1,000 gross sales payable by the business (this is not 5%, per se, as 5% implies direct application to gross whereas this is $50 per $1,000).

The consumer only pays the additional "5%" if the business decides to raise the price by 5% to "cover". Considering the amount of profit many of these businesses are generating, this isn't exactly something that will send them to the poorhouse.

Duncan20903

What in the world makes you think if something is illegal that it isn't taxable? Guess what, if you're a black market vendor you are just as obligated to pay income tax as if you weren't. Call the CBOE and ask them if illegal sales are exempt from sales&use tax.

I've never understood the people that don't grasp the difference between tax free, like certain municipal bonds, and tax evasion, which is how black market profits are "tax free".

ernst blofeld

Yep, that is how they got Al Capone.