CALIFORNIA'S POT CLUBS OFFER TO PAY MORE TAX IN FISCAL CRISIS

Vendors of "medical marijuana" at legal herbal clinics in Oakland,
California are offering to pay increased taxes in a move that many
believe could save the state from bankruptcy.

Medical marijuana is big business in California. In Oakland last year
"pot clubs" rang up sales of more than $20m (UKP12m). Currently those
clubs pay a minimal tax of $1.20 for every $1,000 of marijuana sold.

However, in a move rare among business owners, the medical marijuana
clinics are offering to raise the tax they pay to $18 for every $1,000
of weed sold. The marijuana tax, which voters will be asked to endorse
in a ballot this month, would bring in about $400,000 of annual
revenue in Oakland alone. If adopted statewide, the taxes could be
worth billions.

California's governor, Arnold Schwarzenegger, declared a statewide
fiscal emergency in California last Wednesday after legislators failed
to agree on a budget to address its $24bn deficit. Tax revenues are
plunging as the state suffers particularly badly in the global
recession, and government offices are closing three days every month
to cut costs.

The results of the postal ballot on the marijuana tax in Oakland will
be announced on 21 July.