IN MARIN, FEW AGREE ON MEDICAL MARIJUANA TAXATION

With counties bracing for more state budget cuts, some are
questioning whether medical marijuana, which is already generating
significant sales tax revenue in one Marin town, should be the
subject of a special tax.

While some contend that taxation of Marin's four dispensaries could
result in increased acceptance of a controversial industry, medical
marijuana advocates nonetheless have reservations about how
additional fees would affect patients.

"I'm not at all opposed to taxation of medical marijuana," said
Elizabeth, manager for the Apela Collective in Novato, who asked that
her last name not be published. "My issue is taxation of people in dire need."

California's pot crop is worth an estimated $14 billion a year. A
bill introduced Pot shots Have you ever purchased medical marijuana?
Yes No this year by Assemblyman Tom Ammiano, D-San Francisco, would
have legalized pot and imposed a $50 per ounce tax, which could
generate $1.3 billion in revenue.

Ammiano has shelved the bill until next year to make revisions, but
the debate over taxing medical marijuana continues.

Oakland voters on July 21 overwhelmingly approved a proposal that
would impose a special 1.8 percent tax on the city's medical pot
clubs, which have been given a new lease on life since Attorney
General Eric Holder announced in February that the Drug Enforcement
Administration would no longer be conducting raids on pot
collectives. Oakland estimates the tax could raise $300,000 a year.

As early as 2010, a statewide proposal to legalize pot cultivation
for personal use and posession of up to an ounce could be put before
voters, under an initiative filed with the California attorney
general last week by medical cannabis dispensary owner Richard Lee
and a group of advocates.

Fairfax Town Manager Michael Rock, who has a 13-year-old medical
marijuana collective within his town limits, said the state is
already cashing in on sales tax from dispensaries following
guidelines issued by Attorney General Jerry Brown and the state's
Board of Equalization last year.

Once tax receipts for the past year are tallied, Fairfax Councilman
Lew Tremaine said he anticipates that the Marin Alliance for Medical
Marijuana, the county's longest operating dispensary, will be among
the town's top five sales-tax generators.

The idea of an additional tax for medical cannabis received mixed
reviews from local dispensary operators.

Scot Candel, attorney for Marin Holistic Solutions, a Corte
Madera-based dispensary, said taxation of medical marijuana would
essentially be a "sin tax," with consequences that would extend to
the patients.

"All it would mean is that patients pay that much more for medical
marijuana," Candel said. "I don't think the government should be
steering patients toward one medicine or another."

Other medical cannabis advocates see the tax as a way to legitimize a
controversial source of medicine.

John, a patient at Apela who did not want his last name used, said he
supports taxation because it would help both the dispensaries and the
community. "How do clubs expect police to guard the dispensaries if
they're not paying taxes?" he said.

Local officials have questions about how to administer such a tax and
what effect it would have on their communities.

"I think it would take a murky situation and make it muddier,"
Supervisor Steve Kinsey said. "I have no problem with the sale of
medical marijuana out of clubs, and I think more supply outlets could
be positive, but taxing doesn't seem to be the way to get to that."

Novato Councilwoman Jeanne MacLeamy said she would not support
proposals to tax medical pot because the drug causes more problems
than it solves. "I really see marijuana as a gateway drug to more
use," MacLeamy said.

Fairfax Councilman Larry Bragman said he supports his town's
dispensary but is not sure if levying additional taxes would be a wise move.

"Pharmaceutical prescriptions are not taxed, and patients are already
paying sales tax," Bragman said. "I'm not so sure it's a great policy
to levy additional tax when they're already paying a hefty sales tax."

But, according to Bragman, the financial benefits to the town of
having a tax-paying dispensary are significant.

"(The dispensary) has definitely been making significant
contributions to the coffers," Bragman said.