OAKLAND COUNCIL BACKS A TAX ON MARIJUANA

OAKLAND, Calif. -- Leaders of this economically hard-hit city are
proposing to tax medical marijuana as a way to help close a record
budget shortfall.

Oakland's City Council last week approved a 1.8% tax on medicinal
marijuana sold in the city. If voters pass the proposal in a July
election, Oakland would become the nation's first city to directly tax
the drug, medical-marijuana advocates say.

Such an outcome would further legitimize medical marijuana in
California and represent the latest victory for advocates. Prospects
for such a tax were made brighter in February, when U.S. Attorney
General Eric Holder announced that the federal government would no
longer raid state-approved dispensaries.

Backers of the Oakland tax on dispensaries said they hope to encourage
other cities to follow suit. The tax would prove "that
government-regulated dispensaries are good neighbors," said James
Anthony, a lawyer who represents the Harborside Health Center, one of
Oakland's medical-marijuana dispensaries.

California is one of 13 states that have legalized medical marijuana,
allowing it to be sold to people with a doctor's recommendation. It is
relatively easy for anyone over 18 years old to obtain such a doctor's
note. Advocates estimate there are 200,000 or more approved
medical-marijuana users in California. Users already pay a sales tax
on the drug.

A city tax on medical marijuana could generate at least $400,000 and
perhaps more than $1 million annually, said Rebecca Kaplan, the
Oakland City Council member who pushed the proposal. The city of
400,000 residents is facing an $83 million shortfall in a $455 million
budget.

The owners and managers of Oakland's four medical-marijuana
dispensaries said they approached the city with the idea. "We wanted
to further legitimize the medical-marijuana paradigm to show that we
are truly willing to assist [Oakland], and to show other cities that
there are social benefits to this," said Keith Stephenson, executive
director of Purple Heart Patient Center.

No formal opposition has formed against the proposal, and Ms. Kaplan
and medical-marijuana advocates said they are confident voters will
approve it.

But Paul Chabot, a Southern California resident who recently founded
the Coalition for a Drug Free California, is opposed to the idea
because he thinks the "quasi-legalization" of marijuana would add more
of the drug into the black market. "It's a front; it also sends the
wrong message to children," he said. "What are you doing to do next,
allow prostitution and tax that? Allow methamphetamine to be sold and
tax that?"