Weed Wars

Dispatches from the California Marijuana Front

June 21, 2010
Pot shops threaten suit over proposed San Jose 'barter' system

Medical marijuana advocates in California's high tech Silicon Valley are furious over what they interpret as a demand for a "barter" system for transactions at pot dispensaries in San Jose.

The city, which is brimming with nearly 70 pot shops, is considering a proposal to cap the number of dispensaries at 10 and ask local voters to approve a 3 percent tax on pot businesses per $1,000 in gross receipts.

But an organization representing numerous dispensaries is particularly irked by language in a city staff memorandum suggesting that no cash sales are allowed at pot shops. Despite the recommendation for a gross receipts tax, the proposed ordinance suggests that dispensaries accept only "bartered-for exchanges" or "in-kind contributions" for medicinal marijuana.

For its part, the state Board of Equalization, which issues sellers permits and collects sales taxes in California, doesn't care what pot dispensary transactions are called. They are all considered taxable sales.

In a letter to Mayor Check Reed and the City Council, San Jose's Medical Cannabis Collectives Coalition also protested a proposed recommendation to ban residents from being members of more than one dispensary or medical marijuana collective. The group called that "an unconstitutional infringement on a patient's right to associate."

With the city due to take up its marijuana ordinance Tuesday, lawsuits are threatened.

"We will litigate to defend our rights," Jim Roberts, an attorney for several local dispensaries, said in a statement.

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