NEWS: Bringing in the Green

An amendment that's in the works could improve an innovative proposal to tax medical marijuana dispensaries.

The city of Berkeley's Medical Marijuana Commission is considering a new tax on cannabis dispensaries as a way to help close a $12.2 million budget shortfall.

In the state of California, taxing pot has long been proposed by supporters of legalization as a means to help rectify our chronic budget crisis. Though Berkeley wouldn't be the first city to levy a tax on dispensaries, the proposal could allow the city to be a beneficial testing ground for this piece of much discussed public policy.

And though this one measure won't be sufficient, dispensaries continue to be profit-makers in a city largely struggling business-wise. Instating a tax on these otherwise successful businesses would be a legitimate alternative revenue steam that could help close this year's deficit.

Unlike Oakland, where voters approved a tax on dispensaries last year, the current proposal in Berkeley would be levied based on square footage, rather than sales revenue. According to City Attorney Zach Cowan, the reason for the distinction is because dispensaries can sometimes attain non-profit status in the state of California, rendering them exempt from taxes on receipts.

Though this concern seems reasonable, the proposal has drawn heat from the city's three dispensaries, who characterize it as unfair and unprecedented. The proposed tax is still being developed, however, and lawmakers are considering an amendment that would institute an initial tax based on revenue, with the square-footage provision to kick in if a dispensary became a non-profit.

We encourage the commission to approve this amendment, which is certainly fairer and could motivate more support for the tax from the dispensaries. The city should move forward with this innovative idea to capitalize on an untapped source of revenue and to help bridge its current budget gap.

Source: The Daily Californian