CSDP Blog

Oakland established itself as the first city in the nation to approve increased taxation of medical cannabis sales through a voter referendum, Measure F, as the Los Angeles Times reported on July 22, 2009 ("Oakland Voters Approve a Tax on Medical Marijuana"). According to the article, "The measure will levy an $18 tax for every $1,000 in gross marijuana sales." Currently, dispensaries "pay a $1.20 business tax on each $1,000 in sales." But club operators, patients, and the citizenry in general were unfazed by the increase. The article reports that the city's "four medical marijuana dispensaries" collectively supported the tax proposal, and Oakland voters "approved the measure by a margin of 80%," showing astounding unity in the face of a potentially controversial issue.

City officials primarily cited economic concerns when discussing their reasons for proposing and supporting the tax. As executive director of Oakland's Purple Heart Patient Center, Keith Stephenson, said, "There will be some cash-strapped areas that will use this to balance their budgets." City Councilwoman and measure co-sponsor Rebecca Kaplan told the Times that "It was the perfect moment [...]. We had a horrible budget crisis in the city, and we were looking for revenue . . . But it would hardly make sense for us to tax a business that might be shut down by the federal government," covertly referencing Attorney General Eric Holder's promise to end DEA raids on medical marijuana dispensaries operating legally under state guidelines. The increased tax will indeed give the city an economic hand up. Kaplan "said it could generate $1 million in annual revenue," though Oakland's "city administrator places the estimate at about $300,000."

Other California cities are watching the measure's progress closely and even considering putting forward similar proposals themselves. According to the Times, "The Los Angeles City Council proposed a medical marijuana tax July 15, and Kaplan said Berkeley and San Francisco may consider similar legislation."