Weed Wars

Dispatches from the California Marijuana Front

April 1, 2010
San Jose ponders taxing dispensaries to medicate fiscal ills

Late last year, when officials in the city of San Jose talked about doing something about their marijuana dispensaries, there were far fewer pot shops in town.

Now the Silicon Valley city is teeming with cannabis club start-ups. An internet pot club site lists 55 in town, from Amsterdam's Garden to Green Skunk Xpress, from The Leaning leaf to Purple High.

On Tuesday, the San Jose City Council voted to do something about it - at least in theory. The council approved a recommendation to consider an ordinance in June that could limit the number of dispensaries in town.

Notably, the proposal - if adopted - would also ask local voters to approve a tax on local pot shops in the hope of generating new cash for a fiscally-challenged city grappling with major cuts in municipal services.

"They took the first step," said Linda Stokely, a spokeswoman for the Medical Cannabis Collective Coalition, a group representing 16 San Jose dispensaries. "The big story is that back in November, when the city first looked at this, there were five dispensaries in San Jose. Now that they did nothing there are more than 50. Once they put an ordinance in place, there is going to be a standard."

If San Jose decides to regulate and cultivate its pot clubs for tax revenues, it would follow in the footsteps of Oakland.

Last summer, in a political watershed for a movement that has since gone on to qualify an initiative for legalizing and taxing pot, 80 percent of Oakland voters approved a gross receipts tax that charged the city's four pot dispensaries $18 for every $1,000 in revenue.

In Los Angeles, which is waging a major effort to shutter hundreds of dispensaries, the City Council never seriously considered taxing their operations.

In Sacramento, where city has 39 registered pot dispensaries, the city is contemplating an ordinance to permit no more than a dozen pot shops in the capital and impose strict requirements for their operations. Though Sacramento officials closely studied the Oakland model, no proposal has advanced on a special tax for cannabis cash.

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