L.A. councilwoman proposes city tax on medical marijuana

Los Angeles City Councilwoman Janice Hahn has proposed that the council consider imposing a tax on sales of medical marijuana.

Los Angeles has hundreds of medical marijuana dispensaries. As California's local and state governments look to plug their budget deficits, attention has started to focus on marijuana as an untapped source.

Oakland voters will decide Tuesday on a medical marijuana tax.

"In this current economic crisis, we need to get creative about how we raise funds," Hahn said in a statement. "A tax on medical marijuana could enable the city to continue providing services we might otherwise have to cut."

Hahn's motion was supported by Councilmen Dennis Zine and Bill Rosendahl.

-- John Hoeffel

Comments

[Paul Gascoigne]

I nor live in LA or need medical marijuana (notice I added medical?) and think its a great idea. I say tax the sellers, not the buyers, as they have enough problems already. Has anyone seen my lighter?

[Otis]

What is so creative about taxing marijuana? This stuff should've been taxed since 1937.

[W. Blow]

Are other medical services or prescriptions currently taxed? It seems to me that if they are not, it is unfair to tax medical marijuana regardless of the projected revenue.

[Ruby Jackson]

I'm surprised to learn there is any business operating in the city that isn't paying sales tax. Why this loophole?

[Eric of Reseda]

INSANE that marijuana isn't legal and taxed. There is over-the-counter cough medicine more dangerous than this leaf, and it has unquestionable legitimate medical applications (and industrial as well). Just who said marijuana should be illegal and why?

[Jhak Schiddt]

Janice Hahn will increase the street value of illegal pot, and the crime related to it.
Legalize pot, then treat recreational pot with the same laws as alcohol.
Leave sick people alone.

[Curly]

Tax it and it will become a bootleged item.

[Ezra]

This is a good idea as long as the tax doesn't make the prices so high that it will drive consumers back to the black market.

[Mike Dills]

Two things our Prez must do.
End the so called "War"?
Legalize it.
I found your lighter, is it a blue Bic?

[JewelD]

Good idea. Same principle as taxing tobacco and alcohol.

[Max macias]

Why don't they tax other prescription drugs too? Now that would bring in some real money!

[Jordan]

BAD IDEA!!!! The goverment screws up everything else like are Schools, hospitals, ECT. They will end up over taxing Marijuana, making it cheaper to buy from street dealers, gangs, cartels. STREET DEALERS DON"T CHARGE TAXES EITHER HAHAHAHA.

[Marcos El Malo]

@Paul: What is the difference? If the seller is being taxed, they pass that tax onto the buyer. Reach for a little logic before reaching for the bong.

[Jordan]

BAD IDEA!!!! The goverment screws up everything else like are Schools, hospitals, ECT. They will end up over taxing Marijuana, making it cheaper to buy from street dealers, gangs, cartels. STREET DEALERS DON"T CHARGE TAXES EITHER HAHAHAHA.

[clvngodess]

Yes, tax the dispensaries. Why not? They are in business in the city and state. It's a great revenue source. Don't tax the patients, they're there for a reason, most of them.

And while we're at it, make it legal...

[Jordan]

BAD IDEA!!!! The goverment screws up everything else like are Schools, hospitals, ECT. They will end up over taxing Marijuana, making it cheaper to buy from street dealers, gangs, cartels. STREET DEALERS DON"T CHARGE TAXES EITHER HAHAHAHA.

[eric]

This is a good move, late but still good.

@Jordan

If you think you dont pay some form of tax when buying from a street dealer, you are either 10years old or really have no clue about drug world.

[Mr. Hollywood]

This story is missing an important point. Medical marijuana dispensaries are ALREADY being taxed in the form of sales tax (currently more than 9%). What Hahn seems to be proposing is a "sin tax" akin to what is done with cigarettes and booze. I'm not quite sure why medical marijuana should be put in the same category as those to substances?

Interesting point from one of the above posters about how overtaxing might lead to an increase in illegal dealing.

[IE420 Patient]

Hold on now. I don't get this. When I get I "medicine" my receipts say "SALES TAX INCLUDED." I go to two dispensaries in LA and one in Oakland when in NorCal. All places have a reference to Sales Tax being paid on them.

I've seen many documentaries on medical marijuana and the one's featured mention how much revenue they provide their local gov'ts.

So, obviously many are mis-informed including possible the City Council. I mean ... it would surprise me given the mess now created in LA due to no oversight. But, fact is many dispensaries are already paying taxes. That being said, there needs to be clarification on the current practice. It is voluntary and this now makes it mandatory? Or, is there no real "process" behind the current collection of marijuana revenue and this would put a "process" in place?

Something is not right....

[Diablito]

If they tax it, then it becomes something they cannot turn a blind eye to any longer. The state will be forced to legalize for recreational use, which in turn will set a model for the entire country.

[Mark McD]

Taxing medical marijuana intimates that it is not a medication and that "medical" is a euphemism. We don't tax other medications. It smacks of "don't ask, don't tell" to me. If you're going to tax the stuff, LEGALIZE IT! The revenue to the state would have closed the budget deficit weeks ago.

[PMA]

Who will enforce the tax to make sure that marijuana operations are actually paying it? The City of Los Angeles has proven itself to be incompetent in regulating medical marijuana, and the hundreds of dispensaries that have opened illegally all across the city. So why should we believe that it would be effective in collecting this tax?

[James L]

The current tax on medical marijuana is extremely low at this point. You will see a note saying that tax has been imposed but med. mj is not taxed at the same rate as other goods and medicine. It may be unfortunate to have to pay a couple extra dollars for the medication but in the long run it may very well show the rest of the nation the economic possibilities that we are missing out on as of now.

[jimmie walker]

The bigger issue is that on the state level they are considering a marijuana tax on RECREATIONAL USE and taxing it like alcohol. Anyone over the age of 21 could posses sell and grow with a tax attached to the transaction.

[benny]

the fact of the matter is that medical marijuana users are prescribed this drug by a doctor. We don't put extra taxes on cancer patients trying to get their expensive prescription drugs so why do that for marijuana. If you want to put a "sin tax" on marijuana make it legal for all and tax the recreational market that develops not the medical end.

p.s. NO TAXATION WITHOUT REPRESENTATION!! make dispensaries legitimate legal (both federally and state wide) before trying to make excessive money off them. Why give money to a county that is just going to turn around let the DEA come in and raid dispensaries and medical marijuana grow projects.

[Clem]

People pay sales tax at dispensaries for purchases. If a 'sin tax' is added, the businesses will pass on those added costs to customers. The problem is that prices at these shops are already higher that what you would find on the streets for similar products, but not too much higher.

For every dollar increase, a percentage of peope will stop buying legally and buy on the street or grow there own if possible. Both decisions decrease the amount of overall taxes collected because every dollar increase will drive more and more people back to the cheaper, illegal methods of purchase.

The key is to find a balance that can create tax revenue but still keeps customers coming in and avoiding purchases that cannot be taxed (illegal or home-grown). I believe we are very close to that point now.

In economics, this is known as the Laffer Curve (for Dr Art Laffer), and is true of all methods of taxation.

The high price at dispensaries (vs the street price) limits the re-sale ability. There is no profit for a person to buy a product at $100 and sell it for $100. There must be a mark up. When the mark-up is added, street dealers generally cannot find enough customers to make a profit becasuse of the increase in cost and therefore the price charged to customers.

If taxes are increased and dispensaries pass these costs on to consumers, then less people will buy legally and more people will go back into the 'underground' (untaxed) economy.

The logical results will be an increase in illegal marijuana activity, and more truly sick people putting themselves in harm's way- both from the government and street dealers.
These are situations voters tried to fix by making the product available via dispensaries in the first place.

One more politician trying to use the system to override the will of the people.

Thoughts?

[Jordan]

I've been going to a dispensarie to buy my medication for 2 years and recently it says "Tax included" but the price of the Oz has always been 350 and still is, so how am i paying Taxes? and if they do put a 50 $ Tax for every OZ bought it would go up to 400 an OZ thats almost 15% higher in price . I'm sure I can find a better deal from a street dealer/grower, if it comes to being TAXED. I will not TOLERATE being taxed by the state of CALIFORNIA and all these for the MILIONTH time. MARIJUANA COULDN'T EVEN COME CLOSE TO SOLVING CALIFORNIA'S BUDGET CRISIS!!!!

[Jordan]

I've been going to a dispensarie to buy my medication for 2 years and recently it says "Tax included" but the price of the Oz has always been 350 and still is, so how am i paying Taxes? and if they do put a 50 $ Tax for every OZ bought it would go up to 400 an OZ thats almost 15% higher in price . I'm sure I can find a better deal from a street dealer/grower, if it comes to being TAXED. I will not TOLERATE being taxed by the state of CALIFORNIA and all these for the MILIONTH time. MARIJUANA COULDN'T EVEN COME CLOSE TO SOLVING CALIFORNIA'S BUDGET CRISIS!!!!

[Mark]

I agree with some of the other comments. It's medicine, are we going to tax grandma for her insulin too?

I believe the dispensaries already pay taxes in the form of city/business license taxes.

A 'sin tax' should only be applied if the substance was legalized for everyone (sans minors) akin to tobacco and cigarettes. It's a good idea IMHO.

I think the tax base increase via legalization would be massive. Sure it grows in a backyard like tomatoes, but most buy them at a store, rather than growing their own.

This is just the perspective from a current non medical/recreational user. (tried it a few times 21 years ago)

[Louie]

I am in agreement with many other posters here, that the tax comes after the legalization does. Prices are already incredibly inflated in Southern California (for medical as well as street sold weed), not to mention when compared to the rest of the west coast the quality and freshness here is really lacking. Seems an ounce here ranges anywhere from $350 to upwards of $500, when in a place like Portland Oregon, an ounce of FRESH bud can be found for $220 an ounce. We're being ripped off regardless though, so I guess complaining is futile.

[Mark]

QUOTE:"The current tax on medical marijuana is extremely low at this point. You will see a note saying that tax has been imposed but med. mj is not taxed at the same rate as other goods and medicine. It may be unfortunate to have to pay a couple extra dollars for the medication but in the long run it may very well show the rest of the nation the economic possibilities that we are missing out on as of now."
Posted by: James L | July 16, 2009 at 11:54 AM

Sorry James maybe I missed it, but what 'note'? And not taxed at the same rate as other goods and medicine, are we talking over the counter medicine, or prescribed medicine? Not debating here, I'd just like a source for this info.

Mark

[J Moore]

Lets start taxing criminals for everything the do. Medical POT taxes are BS just another end run by Dems at legaling all street drugs down the road. Lets tax hookers next we could get more money from the hookers to pay for the dems public assistane programs, Once the dems get the tax money they can not live without it.Taxs have become a nightmare and blackhole for everyone who works for a living.

Watch my lips NO NEW TAXs. If you want a shooting WAR just keep raising taxs.

[Dave's not home]

Taxing this will not create a bootleg, wrong slippery-slope. Tobacco and Alcohol gets taxed, so why should we see this be taxed, after all, the legitimate "Patients" will tolerate this to find, not a cure, but at least alleviate the pain, right

[Paul]

Stop crying about it. All we've wanted and said for years is that it should be legal to buy like booze and cigs. Those places that say TAX INCLUDED are cash only and are just pocketing the money like a street dealer would. Notice any credit card purchases are taxed sales tax. Wake up and realize this is what we've all been waiting for. The supply and demand will drive the price down at the Pharmacy with increased supply. Shut up and pay your taxes unless your a illegal alien who doesn't pay taxes anyway. And don't give me that sales and gas tax alone provide the money for those that are ripping off the system. ATF will read ATFM and be happy about it.

[AB 390]

Tell your legislators in Sacramento to legalize, tax, and regulate marijuana. Visit http://yes390.org

[Capt. Recall]

Hey you LA politicians stop playing the Harry Anslinger card of the 19th century and join the 21st century which includes educated responsible diverse adult constituents who see through this effort of yours to extort medical cannabis clubs in LA! First you prided yourselves on stopping the marijuana collectives from opening up by closing some loop hole which had allowed them to thieve in LA until recently, now you want to extort the remaining medical cannabis collectives?! What a wretched bunch of scum buckets you LA politicians must be. I am sure the collectives would have enjoyed paying extra tax just like they want to do in Oakland but you turn it into fear and extortion. Damn everyone of those LA politicians for this kind of un American behavior. You need to apologize and take back everything you've said and did against the medical cannabis collectives in Los Angeles for the passed couple of months you bunch of pansies.

[mastab]

Yeah just buy it from the corner, no taxes :)

[Professor Smith]

If pot is made legal, the value will drop like a rock from an airplane. Your local farmer will sell you a bale for a fist full of dollars. It's the prohibition that has caused prices to skyrocket. It's oil and petro-chemical companies, and now alcohol & pharma companies that have lobbied to keep it illegal, and have distributed propaganda far and wide.

In a parallel universe, where Anslinger was not successful, the people have clean air by burning hemp oil. Their world is literally covered in trees because their paper is made from hemp. Their land is fertile, and their water is clean because their clothes are made from hemp, not cotton, which needs pesticides and fertilizers. Their houses are stronger because they are made from the superior construction boards made from hemp material. Why even the concrete is made from hemp, which is lighter, and stronger than what we currently use. Their plastic materials are made from hemp, and their landfills are non-toxic. Their cosmetics are non-allergenic because they are hemp based. They are all healthier because they use hemp oil for cooking and salad dressing.

I see a concerted effort to keep the world's population dumbed down to all incredible benefits of legalizing this innocent plant. The reasons are selfish and greedy, and have nothing to do with public good.

[Olden Atwoody]

Janice Hahn - "we need to get creative about how we raise funds..."

Disgusting.

Why not tax all medical services and supplies?

Hey, want to raise money? Levy a 10 cent tax on every tortilla consumed in L.A. That will bring out the votes, Sister!

[Gumshrud]

I got an idea, we can tax cannabis and call the tax the "Marijauana Stamp Tax"....

[j-Peso]

Seems like some of you are a bit confused. Medical marijuana collectives are required to pay all the taxes that any retail store would pay. The proposed tax is an additional 1.9% on top of our state tax and business tax.

Most legitimate operations are paying taxes, especially now that by adhering to state laws, the feds now leave you alone (thanks to Obam pulling their funding in late Feb of this year). The reasoning behind "sales tax included" is to make it less painful for the consumer to visually see the tax added after the fact.

I should know...I own a collective. The more businesses that follow the rules, pay taxes and have a positive effect on the community, the faster we'll get to full legalization, regulation and taxation.