WHAT ABOUT TAXING POT?

Council Needs To Address Medi-Pot's Revenue Potential

One subject that did not come up during the Chico City Council's
discussion last week of a proposed medical-marijuana ordinance was
taxes. By crafting the proposal as a land-use matter, the council
ignored an important question: If the city is going to allow
medical-marijuana dispensaries and cooperatives, should it impose
special taxes on them, and if so how should the taxes be structured?

This is not a new issue. One of the reasons why many dispensary
operators opposed Proposition 19 on the Nov. 2 ballot was because it
empowered local governments to impose new taxes on marijuana
production and sales. At the same time, voters in nine California
cities, including several of the state's largest, overwhelmingly
approved new taxes on medical cannabis.

In Albany, for example, voters decided by a margin of 83-17 percent in
favor of a measure that allows city officials to impose a
$25-per-square-foot tax on nonprofit medi-pot operations. In La
Puente, voters authorized a figure of $100 per square foot that is
expected to generate as much as $3 million annually in city revenue.

Several California cities-including Oakland and Berkeley-are prepared
to allow industrial-sized cultivation facilities in order to benefit
from the tax revenues they will generate.

At last week's meeting, Councilman Andy Holcombe briefly mentioned
possible revenues to the city from local grows, and a group of
Southern California businessmen said they wanted to build a
600,000-square-foot marijuana nursery in the vacant Koret building at
the airport.

All of this suggests that, in addition to resolving the land-use
issues surrounding dispensaries and collectives, the city needs to
begin seriously considering how it intends to tax them.