MARIJUANA SUPPORTERS WELCOME A TAX INCREASE

OAKLAND, Calif. — Perhaps only in the sometimes hazy world of medical
marijuana could higher taxes be considered good news.

But sure enough, supporters of medical marijuana were pleasantly
pleased Wednesday after Oakland voters overwhelmingly approved a huge
tax increase — 15 times the former rate — on sales at the city's
handful of permitted medical marijuana dispensaries.

Believed to be the first of its kind, Measure F received nearly 80
percent of the vote, a landslide that pot professionals hailed as a
significant step in the legitimization of the cannabis industry.

It's one more victory in a big war," said Richard Lee, president of
Oaksterdam University, a downtown storefront where the aroma of
marijuana pervades the sidewalk. "It's a lot better than being
arrested and thrown in jail."

Medical marijuana has been legal in California since 1996, but its
dispensaries and their proprietors have periodically faced crackdowns
from federal authorities who do not recognize the state law, which was
passed as Proposition 215. Supporters of the drug's medical use have
been cheered, however, by recent remarks from Attorney General Eric H.
Holder Jr. that those abiding by state law will not be made a target
by federal agents.

California, whose $26 billion budget crisis has dispirited many
residents, has toyed with the idea of legalizing marijuana, with a
bill that would legalize and tax the drug scheduled to be taken up by
the Assembly later this year. The dispensaries already pay some $18
million a year in state sales tax, according to the Board of
Equalization.

Laura Thomas, deputy state director for the Drug Policy Alliance in
San Francisco, which lobbies for changes in drug policy, said the
recession was forcing many states to consider "untouchable topics" as
potential revenue streams. "In hard budget times people are willing to
be more creative," Ms. Thomas said.

In Oakland, Measure F raises the tax on "gross receipts" at a handful
of dispensaries to $18 per $1,000 worth of goods sold, and is expected
to raise about $300,000 in new taxes. That is not much money — the
city just closed an $83 million budget gap — but even so, a spokesman
for Mayor Ron Dellums said the mayor was grateful for "all measures
that will help with our budget situation."

For Mr. Lee, who plans to introduce a ballot measure this week — with
an eye toward getting it on the ballot in 2010 — seeking to legalize
personal, nonmedical use of the drug, the election victory means he
would pay about $42,000 more in taxes. Not that he minds.

This tax," he said, "is a lot cheaper than lawyers."