What Could Weed Mean for LA's Coffers?

City council members want to explore possible marijuana tax

A trio of City Council members called Wednesday for exploring the possibility of taxing medical marijuana sold within city limits.

The motion, presented by Councilwoman Janice Hahn and Councilman Dennis Zine, and seconded by Councilman Bill Rosendahl, directed the City Administrative Officer to "report on the feasibility of imposing a 'cannabis business tax' on legally operating medical marijuana dispensaries in the city."

"In this current economic crisis, we need to get creative about how to raise funds," Hahn said. "A tax on medical marijuana could enable the city to continue providing services we might otherwise have to cut."

Zine added, "Part of becoming a legitimate business in the city of Los Angeles means supporting local government by paying a fair share of municipal taxes."

In their motion, the council members noted the city of Oakland will vote next week on a ballot measure imposing a 1.8 percent tax on medical marijuana sold within its boundaries.

Proponents of Measure F claimed Oakland's four licensed dispensaries had total gross receipts of $19.6 million last year. By their calculation, the new tax -- if approved -- could provide the city with as much as $294,000 in additional revenue.

Partly because of a legal loophole, Los Angeles currently has 400 dispensaries -- a hundred times as many as Oakland.


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"This is a creative solution that will bring revenue to our city and also recognize the additional benefits the medical marijuana industry can contribute," Rosendahl said.

The City Council's Planning and Land Use Management Committee is working to close the loophole in the temporary ordinance governing medical marijuana dispensaries. That loophole allowed dispensaries to stay open because of hardship exemptions.

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