OAKLAND VOTERS APPROVE A TAX ON MEDICAL MARIJUANA

Shops Selling Pot in the Cash-Strapped City Will Pay $18 on Each
$1,000 in Sales. the City Administrator Estimates That It Could Raise
$300,000 in Annual Revenue.

Oakland voters resoundingly approved a tax increase on medical
marijuana Tuesday evening, the first such tax of its kind in the nation.

The measure will levy an $18 tax for every $1,000 in gross marijuana
sales. Firms in the city now pay a $1.20 business tax on each $1,000
in sales. Other cities may soon follow suit. Voters approved the
measure by a margin of 80%, according to preliminary results released
by the Alameda County Registrar of Voters.

Oakland City Councilwoman Rebecca Kaplan, who co-sponsored the
measure, said it could generate $1 million in annual revenue.

The city administrator places the estimate at about $300,000.

The Los Angeles City Council proposed a medical marijuana tax July
15, and Kaplan said Berkeley and San Francisco may consider similar
legislation.

"Oakland will show that this can work if it's done right," said Keith
Stephenson, executive director of the Purple Heart Patient Center.

"There will be some cash-strapped areas that will use this to balance
their budgets."

The legislation was backed by Oakland's four medical marijuana
dispensaries. There was no organized opposition.

The city's four dispensaries reported revenue of $19.7 million in the
last fiscal year. Kaplan said budget gaps and a pledge by the Obama
administration to stop prosecution of dispensaries that adhere to
state laws have spurred officials to consider marijuana as a revenue
source. The legislation was one of four mail-in ballot measures
passed to help close the city's $83-million shortfall.

"It was the perfect moment," Kaplan said. "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."

Legislation is also being considered on a statewide level.
Assemblyman Tom Ammiano (D-San Francisco) introduced a bill earlier
this year to legalize and tax marijuana.