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.