[UPDATED:] Long Beach Weighs Marijuana Tax

By Matt Coker Wed., Jul. 7 2010 at 12:05 PM

Categories: Cannabis Chronicles, Long Beach, OC Media

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UPDATE: The council voted 8-1 to hold a hearing next month on whether to put a medical-marijuana tax on the November city ballot.

The Long Beach City Council considered a proposal Tuesday night to put a ballot measure before local voters that would tax marijuana.

However, Americans for Safe Access (ASA), the nation's largest medical marijuana advocacy group, has a problem with plan foisted by Long Beach's director of financial management.

Under Lori Ann Farrell's proposal, medical marijuana collectives would be charged a 5 percent gross receipts tax, while sites that are used exclusively to cultivate cannabis would be hit with a tax of 0.75 cents per square foot.

The 5 percent tax is "pretty steep," Kris Hermes, an ASA spokesman, tells the Long Beach Press-Telegram.

His group fears the tax would be passed on to patients who may not be able to afford it. The ASA also considers medical marijuana the equivalent of prescription drugs, which aren't taxed.

Should legalization pass in November, Farrell is proposing a 5- to 10-percent tax on marijuana-related businesses in the city.

Long Beach once had as many as 85 dispensaries, but that number is expected to drop to around 30 by the time new regulations on the businesses take full effect.

Farrell proposed the City Council agree to setting an Aug. 3 hearing to consider whether to put the pot taxes on the November ballot. Because no elected positions are up for grabs in that election, the council would have to declare a fiscal emergency at that August hearing.

Berkeley and Sacramento are also weighing pot taxes. Oakland was the first city in the country to pass a tax on sales at medical marijuana dispensaries.

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