Oakland, CA Approves Landmark Medical Marijuana Tax

The voters of city of Oakland, CA, have approved the first tax on medical marijuana in the country. The city has four dispensaries that took in about $19.7 million in revenue in the last fiscal year.

While affecting only the city of Oakland, it is hoped that the new tax will could help legitimize medical marijuana; the entire state is also considering such a tax.

The measure will levy an $18 tax for every $1,000 in gross marijuana sales. Oakland firms in the city already pay a $1.20 business tax on each $1,000 in sales. Voters approved Measure F by a margin of 80%, according to preliminary results released by the Alameda County Registrar of Voters.

Oakland's city administrator estimates that the new marijuana tax will generate an estimated $294,000 for the city in its first year. Oakland city councilwoman Rebecca Kaplan, who co-sponsored the measure, is a bit more generous, estimating as much as $1 million per year.

An earlier pledge by Eric Holder, Attorney General, that the Obama administration to stop prosecution of dispensaries that follow state laws led city officials to consider taxation of marijuana as a revenue source.

Kaplan said, with regard to the new guidelines over medical marijuana:

"It was the perfect moment. We had a horrible budget crisis in the city, and we were looking for revenue. But it would hardly make sense for us to tax a business that might be shut down by the federal government."

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