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Oakland voters approve a tax on medical marijuana

Shops selling pot in the cash-strapped city will pay $18 on each $1,000 in sales. The city administrator estimates that it could raise $300,000 in annual revenue.

July 22, 2009|Julie Strack

SAN FRANCISCO — Oakland voters resoundingly approved a tax increase on medical marijuana Tuesday evening, the first such tax of its kind in the nation.

The measure will levy an $18 tax for every $1,000 in gross marijuana sales. Firms in the city now pay a $1.20 business tax on each $1,000 in sales. Other cities may soon follow suit. Voters approved the measure by a margin of 80%, according to preliminary results released by the Alameda County Registrar of Voters.

Oakland City Councilwoman Rebecca Kaplan, who co-sponsored the measure, said it could generate $1 million in annual revenue.

The city administrator places the estimate at about $300,000.

The Los Angeles City Council proposed a medical marijuana tax July 15, and Kaplan said Berkeley and San Francisco may consider similar legislation.

"Oakland will show that this can work if it's done right," said Keith Stephenson, executive director of the Purple Heart Patient Center.

"There will be some cash-strapped areas that will use this to balance their budgets."

The legislation was backed by Oakland's four medical marijuana dispensaries. There was no organized opposition.

The city's four dispensaries reported revenue of $19.7 million in the last fiscal year. Kaplan said budget gaps and a pledge by the Obama administration to stop prosecution of dispensaries that adhere to state laws have spurred officials to consider marijuana as a revenue source. The legislation was one of four mail-in ballot measures passed to help close the city's $83-million shortfall.

"It was the perfect moment," Kaplan said. "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."

Legislation is also being considered on a statewide level. Assemblyman Tom Ammiano (D-San Francisco) introduced a bill earlier this year to legalize and tax marijuana.

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julie.strack@latimes.com

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