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Dispensary Coalition Slams Proposed Tax On Medical Pot

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LOS ANGELES (CBS) — A coalition of medical marijuana dispensary operators, patients and caregivers from across the Southland say they stand opposed to a March 8 ballot measure seeking to tax those distributing the drug.

If Los Angeles voters approve Measure M, the city will start collecting $50 out of every $1,000 in dispensaries’ gross receipts.

Proponents estimated the tax could raise up to $10 million, but Americans For Safe Access spokesman Kris Hermes warned it would cause suffering among medical marijuana patients.

“Measure M would impose an additional 5 percent tax on the medication that patients in the city of Los Angeles would have to pay,” he said. “That’s on top of the sales tax, which is nearly 10 percent in Los Angeles, that they already pay.”

“The medical marijuana that is sold in Southern California is fairly expensive — in some cases prohibitively expensive — for medical marijuana patients, especially those folks that are on low income or fixed income,” he added. “To have to pay nearly 15 percent on top of that is very burdensome.”

Hermes said an eighth of an ounce of medical marijuana typically costs $40-$60, and certain high quality varieties are even more expensive.

Another group, the Greater Los Angeles Collective Alliance, vowed to oppose the measure because the City Council intends to use a lottery to decide which dispensaries can continue operating in their current locations.

“The Los Angeles City Council is using a lottery, rather than selecting the oldest facilities with clean operating records and allowing them to serve the patient community,” stated Yamileth Bolanes, president of the Greater Los Angeles Collective Alliance.”To demand patients to pay a tax, which would them be used to gamble away patient safety, is simply unacceptable.”

The coalition opposing Measure M has a website, and the group plans to hold events around the city to inform voters about the tax and the lottery.

The council amended its medical marijuana ordinance last month, after a judge ruled certain aspect unconstitutional. The vote legitimized dispensaries that opened on or before Sept. 14, 2007, and banned the rest.

To break up clusters of dispensaries, they decided to select only 100 of them to undergo inspections, and then hold a lottery to determine their order on a “priority list.”

Those at the top of the list will get the first pick of locations.

Councilman Ed Reyes defended the lottery system, saying “it is in place because a judge requires us to have a legal process that doesn’t show the kind of favoritism that he felt was in place before.”

“It’s unfortunate because we have a `Catch 22,”‘ he added. “If we don’t have Measure M, we won’t have enough resources to do the kind of enforcement, and checking that could probably allow us to change to change the lottery system into some more pragmatic and more rewarding to individuals who own these facilities and are doing it for the right reasons.”

Councilman Richard Alarcon said dispensaries should pay the tax.

“We all have different opinions about things that they sell, but then a lot of us have problems with other kinds of legalized establishments who get taxed,” he said. “All this measure does is say that if you are a legitimately operating business in Los Angeles, you should be taxed as well.”

There are hundreds of dispensaries across Los Angeles, but only nonprofit organizations whose members cultivate marijuana for medical purposes are considered legal.

Los Angeles would not be the first city to tax pot.

Councilwoman Janice Hahn, who proposed the ballot measure, said San Jose and La Puente charge $100 per $1,000 in gross receipts; Oakland and Richmond, charge $50; Sacramento, $40; and Berkeley, $25. Long Beach is considering a tax of $50.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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