Is Ranch Cordova trying to tax cannabis out of reach?
Marijuana isn’t totally legal in California—yet—but lawmakers in both Rancho Cordova and the city of Sacramento are ready for potentially high times ahead. For instance, if Proposition 19 passes, a trio of local measures also is up for vote this November that could impose big taxes on recreational and medical cannabis.
Sacramento’s pot-business tax, Measure C, would set new rates for city cannabis clubs, ranging from 4 percent for medical-pot dispensaries and up to 10 percent for recreational pot. Rancho Cordova’s Measure H is similar; tax rates would be 12 and 15 percent, respectively.
But Rancho Cordova’s Measure O would require residents to pay a cannabis-cultivation tax of up to $900 per square foot annually. For a modest grow operation, this could cost a whopping $180,000 each year.
Opponents, including national cannabis-rights advocates Americans for Safe Access, call Rancho’s measure a “de facto ban” and a means to circumvent Proposition 19.
“We flat out oppose any additional taxes,” said Kris Hermes of ASA. “Patients already pay an exorbitant sales tax that is often prohibitively expensive.” Medical marijuana currently has an 8.5 percent sales tax; the measures, if approved, could tax cannabis at a rate of nearly 25 percent.
Critics argue that such levies shouldn’t be on par with alcohol and cigarette taxation. But local governments surely would welcome any additional revenue. And most area pot clubs don’t mind paying increased taxes, especially if doing so means obtaining a legit business permit, as will be the case in the city. Still, patients’ rights advocates say new taxes on cannabis will make it harder for the sick and poor to obtain marijuana, whether they grow it on their own or purchase it at dispensaries.
Only one other city in the country, Albany in the Bay Area, is proposing a cultivation tax similar to that in Rancho Cordova. Hermes calls both ideas “especially egregious.”
“We understand that there are a lot of cash-strapped local economies out there that are seeking creative, alternative revenue,” Hermes said, “but we don’t think that that should be on the backs of patients. If anything, that tax burden should be shifted to recreational use, if Prop. 19 passes, or further away from the point of sale.”
ASA, which fights for legal access to medical marijuana and increased scientific research, would like to see local governments instead tax and regulate large-scale cultivation, such as in Berkeley and Oakland.
Hermes also said that, if Rancho Cordova’s measures pass, it will no doubt be challenged in courts.