[420 Girl]

Should California voters approve a November ballot measure to legalize recreational marijuana use, the city of Sacramento is prepared to tax it.

The City Council decided late Tuesday to place a companion measure on the ballot for a 5 percent to 10 percent local tax on potential retail sales of marijuana. The city also is asking voters to decide whether to impose a 2 percent to 4 percent tax on gross receipts at existing medical marijuana dispensaries.

Council member Sandy Sheedy, who sponsored the tax measure, said the city isn't deciding to open the door on a retail pot trade for recreational users. But after getting caught unprepared by an influx of more than three dozen medical marijuana facilities, council members voted unanimously to place the local tax proposal on the ballot.

"We're doing this to get ahead of the process," Sheedy said. "That doesn't mean that now we have a tax and it's OK for everyone to come in" and open retail pot outlets.

Other California cities also are considering how to position themselves in case Californians legalize marijuana beyond current medical use.

Long Beach is considering a 10 percent tax on pot businesses that might open if voters pass Proposition 19. In Rancho Cordova, a Sacramento County suburb that has banned medical marijuana dispensaries, the city is exploring both a retail tax and a tax on people who decide to grow pot in their homes.

"It is such a complicated issue. We want to protect our residents," said Rancho Cordova spokeswoman Nancy Pearl.

She said the City Council on Aug. 2 will discuss a potential fee on recreational users who grow pot to cover city costs for public nuisance complaints or oversight "that will require more vigilance on our part."

Proposition 19 would legalize recreational marijuana use for California adults 21 and over, permit small residential cultivation and allow local governments to tax and regulate pot sales.

The cities preparing for the initiative's potential passage aren't endorsing it. But Dan Newman, a campaign strategist for the Yes-on-19 campaign, Tax Cannabis 2010, applauded Sacramento's decision to place a companion measure on the ballot.

"The City Council's action shows that passing Proposition 19 to control and tax marijuana like alcohol will help fund vital services and … help them balance budgets," he said.

Roger Salazar, spokesman for Public Safety First, the No-on-19 campaign, said the efforts under way should serve as warning signs of the potential harm posed by the pot legalization measure.

"There can be a race to the bottom for taxes to try to lure these (recreational marijuana) businesses to their localities," Salazar said. "The unfortunate thing is that all this potential revenue is contingent on the notion that more people will use this drug."

Should it win voter approval for the local measure, the City of Sacramento is anticipating $300,000 to $500,000 in annual tax revenues from 39 currently registered medical pot dispensaries.

The measure would impose a 2 percent tax on gross receipts at medical pot shops and allow the City Council to increase it to 4 percent. It would set a 5 percent tax rate on potential retail sales of recreational marijuana and permit the council to raise it to 10 percent.

The proposal didn't go over well with medical dispensary operators, who are already subject to state sales taxes on marijuana transactions.

Lanette Davies, operator of the Canna Care dispensary, said the tax undermines pot shops' ability to provide low-cost products to low-income and disabled medical marijuana users.

A marijuana patient, Sue Malone, scolded the council for seeking a discriminatory tax that targets only cannabis businesses. "To even think about that is absolutely sinful," she said.

Last year, Oakland became California's first city to tax marijuana when voters approved a 1.8 percent tax on local dispensaries. Now that city is considering allowing four commercial medical marijuana-growing operations in hopes of generating millions of dollars in new revenues in taxes and licensing fees.

San Jose and Berkeley also are contemplating November ballot initiatives to tax medical marijuana or pot cultivation.

One speaker at Sacramento City Hall wasn't at all happy about cities looking to marijuana as a revenue source. Andre Gayet told council members the taxes sanction narcotics abuse.

"Your eyes have this glazed look with dollar bill signs like you're going to see all these dollars from marijuana," he said. "Let me warn you: Marijuana is just the tip of the iceberg."


NewsHawk: Ganjarden: 420 MAGAZINE
Source: The Sacramento Bee
Author: Peter Hecht
Contact: The Sacramento Bee
Copyright: 2010 The Sacramento Bee
Website: Sacramento ballot measure would allow pot tax if legalization push succeeds


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