Weed Wars

Dispatches from the California Marijuana Front

August 30, 2010
Bill to collect medical marijuana taxes angers pot advocates

Montebello state Senator Ron Calderon is proposing a comprehensive "Cannabis Licensing Act" to regulate and tax multiple sectors of the medical marijuana industry, including pot stores, "growers, wholesalers, retailers, and transporters of cannabis."

California medical marijuana dispensaries currently produce up to $1.3 billion in transactions and up to $105 million in state sales taxes, according to estimates earlier this year by the state Board of Equalization.

Calderon's chief of staff, Rocky Rushing, said the senator introduced Senate Bill 1131 because he believes there are insufficient structures in place to ensure California collects taxes due on legal medicinal pot transactions.

But the measure is stirring protests from marijuana activists, including some who support November's Proposition 19 initiative to legalize recreational pot use and allow cities to tax and regulate retail sales.

Dale Gieringer, director of the California chapter of the National Organization for Reform of Marijuana laws, says the legislation is premature because it seeks to tax numerous marijuana businesses and entities without first guaranteeing them protection under the law.

"SB 1131 would require all commercial growers, retailers, wholesalers, and transporters to register with the state, but would DO NOTHING to legally protect them by changing the law to explicitly legalize wholesale or retail sales," Gieringer wrote in a memo to DrugSense, a policy group promoting alternatives to so-called drug war policies.

In a separate letter to Contra Costa County Assemblyman Tom Torlakson, whose Assembly Rules Committee is reviewing Calderon's late session bill, Gieringer said the bill "also establishes a complicated, unworkable system requiring wholesalers to pre-pay sales taxes that should be collected by retailers."

According to the text of the bill, the Cannabis License Act would require the BOE to issue permits to all medical pot businesses and "require these licensed growers, importers, wholesalers, retailers, and transporters to keep records of every sale, transfer,or delivery of cannabis or cannabis products."

It could subject pot businesses to revocation or suspension of licenses and potential civil or criminal penalties and "seizure or cannabis or cannabis products that are sold or purchased in violation of the act."

Rushing said the bill, considered a long shot to get out of committee, would "simply provide the BOE a mechanism to collect sales taxes that should be paid now by those who grow and dispense medical marijuana."

He added: "This isn't something nefarious. What we're tying to do is generate revenue for a state that is in great need of revenue."

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