Weed and taxes
Thank you so much for your column. As a stoner who loves to read, The 420 combines my favorite pastimes. I’ve had a question about dispensaries for a while, and maybe you can help: The other day, I stopped at a dispensary in Sacramento (don’t want to get anyone in trouble), and I was surprised to find they had a tax on their weed. They had plenty of signs that informed of the tax, and they even listed the price before the tax and after the tax. The weed was great, and it was only a $1.20-per-gram tax, so it wasn’t too much of a big deal, but is it allowed? This has been the only dispensary to ever tax me.
I know the laws are already pretty confusing, but I thought that the only reason dispensaries were allowed to operate was because they don’t explicitly say they sell weed, but rather that they exchange weed for a “donation.” It is through this loophole that they are able to slip through the federal law that prohibits selling weed. Or am I completely mistaken about everything?
You’re welcome. Your letter was hella long, so I had to shorten it a bit, and this answer is also a little long, so I will get right to it.
When clubs first started appearing in the late ’90s, monetary reimbursement for medical cannabis was indeed considered a donation. But as more and more clubs started to appear, the California State Board of Equalization, who is in charge of collecting sales tax, decided that medical cannabis was indeed a taxable item. Not only that, the BOE also decided that cannabis clubs owed it back taxes from before cannabis was a taxable item.
But anyway, yes, cannabis is fully subject to sales tax. In addition, some cities are also taxing cannabis sold at dispensaries. Sacramento has a pot tax, as well as Oakland and Los Angeles. One of the reasons many clubs and dispensaries went along with the idea of a tax was to get cities used to making money in the hope that these cities would then support cannabis clubs. It’s working in Oakland, as the city council there has definitely helped in the fight to keep Harborside Health Center open. Harborside pays more than $1 million a year in taxes to the city of Oakland. And Oakland really needs the money. Everyone needs the money. That’s one of the reasons a recent survey by The Field Poll found that more than 50 percent of Californians want cannabis taxed and regulated like alcohol.
As for the signage, I’ve seen it both ways. Some clubs add the taxes on at the end, some clubs build it into the price on the board so that you stoners—er, patients—don’t have to think too hard.