Oakland Council Backs a Tax on Marijuana

OAKLAND, Calif. -- Leaders of this economically hard-hit city are proposing to tax medical marijuana as a way to help close a record budget shortfall.


Oakland's City Council last week approved a 1.8% tax on medicinal marijuana sold in the city. If voters pass the proposal in a July election, Oakland would become the nation's first city to directly tax the drug, medical-marijuana advocates say.


Such an outcome would further legitimize medical marijuana in California and represent the latest victory for advocates. Prospects for such a tax were made brighter in February, when U.S. Attorney General Eric Holder announced that the federal government would no longer raid state-approved dispensaries.


Backers of the Oakland tax on dispensaries said they hope to encourage other cities to follow suit. The tax would prove "that government-regulated dispensaries are good neighbors," said James Anthony, a lawyer who represents the Harborside Health Center, one of Oakland's medical-marijuana dispensaries.


California is one of 13 states that have legalized medical marijuana, allowing it to be sold to people with a doctor's recommendation. It is relatively easy for anyone over 18 years old to obtain such a doctor's note. Advocates estimate there are 200,000 or more approved medical-marijuana users in California. Users already pay a sales tax on the drug.


A city tax on medical marijuana could generate at least $400,000 and perhaps more than $1 million annually, said Rebecca Kaplan, the Oakland City Council member who pushed the proposal. The city of 400,000 residents is facing an $83 million shortfall in a $455 million budget.


The owners and managers of Oakland's four medical-marijuana dispensaries said they approached the city with the idea. "We wanted to further legitimize the medical-marijuana paradigm to show that we are truly willing to assist [Oakland], and to show other cities that there are social benefits to this," said Keith Stephenson, executive director of Purple Heart Patient Center.