Marijuana Supporters Welcome Tax Increase

The New York Times

OAKLAND, Calif. — Perhaps only in the sometimes hazy world of medical marijuana could higher taxes be considered good news.

But sure enough, supporters of medical marijuana were pleasantly pleased Wednesday after Oakland voters overwhelmingly approved a huge tax increase — 15 times the former rate — on sales at the city’s handful of permitted medical marijuana dispensaries.

Believed to be the first of its kind, Measure F received nearly 80 percent of the vote, a landslide that pot professionals hailed as a significant step in the legitimization of the cannabis industry.

“It’s one more victory in a big war,” said Richard Lee, president of Oaksterdam University, a downtown storefront where the aroma of marijuana pervades the sidewalk. “It’s a lot better than being arrested and thrown in jail.”

Medical marijuana has been legal in California since 1996, but its dispensaries and their proprietors have periodically faced crackdowns from federal authorities who do not recognize the state law, which was passed as Proposition 215. Supporters of the drug’s medical use have been cheered, however, by recent remarks from Attorney General Eric H. Holder Jr. that those abiding by state law will not be made a target by federal agents.

California, whose $26 billion budget crisis has dispirited many residents, has toyed with the idea of legalizing marijuana, with a bill that would legalize and tax the drug scheduled to be taken up by the Assembly later this year. The dispensaries already pay some $18 million a year in state sales tax, according to the Board of Equalization.

Laura Thomas, deputy state director for the Drug Policy Alliance in San Francisco, which lobbies for changes in drug policy, said the recession was forcing many states to consider “untouchable topics” as potential revenue streams. “In hard budget times people are willing to be more creative,” Ms. Thomas said.

In Oakland, Measure F raises the tax on “gross receipts” at a handful of dispensaries to $18 per $1,000 worth of goods sold, and is expected to raise about $300,000 in new taxes. That is not much money — the city just closed an $83 million budget gap — but even so, a spokesman for Mayor Ron Dellums said the mayor was grateful for “all measures that will help with our budget situation.”