The State Board of Equalization already collects around $100 million per year in sales taxes from medical cannabis dispensaries. Now, the agency is laying the groundwork to collect an estimated $1.3 billion more. The State Board of Equalization has convened an internal task force of about a dozen staff to research and provide options for taxing recreational use of marijuana, should it become legal. Board spokesperson Anita Gore confirmed that the task force had been visiting East Bay clubs to learn more about implementing a consumer tax.
Proposition 19, a ballot measure to tax and regulate cannabis like alcohol, allows cities or counties to opt in or out of allowing sales. Cities and counties could also set a rate for taxing the product. But state sales tax would still apply under Prop 19, Gore said. The months-old task force is researching procedures for enforcing a state sales tax along the lines of the tobacco stamp system, in case Prop 19 passes. But with Prop 19 polling at around 50-50, the task force is just due diligence.
“We’re often asked to quickly put together a set of options in terms of ways to implement a new tax,” Gore said.
San Francisco delivery dispensary owner Kevin Reed has previously told Legalization Nation that Board of Equalization employees view California’s cannabis industry as the new cash cow: “They’ve told me, ‘We think you are just like a tobacco or alcohol. You’re the money source. We know where the money is. It’s in marijuana today. We’re broke.'” California currently lacks a budget and is running an estimated $20 billion annual deficit.
Oakland dispensary owner Richard Lee said the Board had been researching operations at his dispensary Coffeeshop Blue Sky, which does crisp daily business in eighths, quarters, and edibles like brownies in downtown Oakland.
California cannabis is an estimated $14 billion a year industry. While the Board of Equalization has said the state could make $1.4 billion annually taxing marijuana, other groups have different opinions on that estimate. An independent RAND Corporation study cautioned against predicting tax revenue, saying receipts could be several times higher than $1.4 billion due to exports, or significantly lower due to an ongoing black market.
California, Feds Tussle Over Cash
Fearful of enticing another federal raid, at least one California medical marijuana dispensary has a unique practice: It pays its state sales taxes every week. Usually businesses pay the state Board of Equalization annually, quarterly, or monthly, but there’s nothing stopping companies from “prepaying” weekly, says board spokesperson Anita Gore. She couldn’t say how many taxpayers deposit that often, but hadn’t heard of the practice until now. The Berkeley Patients Group — a dispensary with about 10,000 patients in the Bay Area — pays weekly ever since a DEA raid in 2007.
The agency pounced on a Southern California offshoot of the Berkeley nonprofit for distributing a federally controlled substance. Agents seized nearly everything on-site as well as $100,000 in funds in a bank account. The $100,000 was taxes it had set aside, Berkeley Patients Group spokesperson Brad Senesac says. Now the multimillion-dollar-a-year dispensary, which is legal under state law, prepays the state to avoid large amounts of cash on the books, which is an invitation to federal scrutiny.
The Berkeley dispensary actually got the money back after the City of Berkeley stood up for it. The city stated in a 2008 resolution: “seizures of assets of medical marijuana dispensaries and collectives have blocked payments of taxes to the state of California and the City of Berkeley.” The city asked federal authorities to back off and they did.
“The raid was terrible,” said Senesac. “Paying weekly is now just another one of those hoops you have to go through and we’re determined to go through them all.”
Berkeley Patients Group, along with two other Berkeley clubs, net about $18.5 million per year.
Boxer Aide Gets Busted for Dope
Which is worse: anti-gay Republican politicians who secretly bugger, or anti-pot Democrats who secretly smoke dope? Either way, such rank hypocrisy deserves divine retribution, which thundered down upon a senior aide of anti-legalization Democrat Barbara Boxer who got busted trying to bring pot into the Hart Senate Office Building Tuesday, Politico reports.
“Marcus M. Stanley, who served as a senior economic adviser and at one time worked on the Senate Environment and Public Works Committee — chaired by Boxer — was stopped by a police officer Tuesday morning when he allegedly tried to ‘remove and conceal’ a leafy green substance from his pocket during a security screening at the Constitution Avenue door of the Hart building around noon, according to a Capitol Police report. … Stanley quickly resigned.”
It’s not the first time politicos have been busted for bringing contraband onto Capitol grounds, where security has popped more than a dozen people for weed and cocaine in the last eighteen months.
Weeds Star Doesn’t Smoke
Weeds star Mary-Louise Parker tells Vanity Fair she never smoked the plant. “I guess if it was going to happen, it would’ve happened when I was younger. But that was never an effective or interesting form of rebellion for me. Because everybody did it. Marijuana was just a social thing. It wasn’t dangerous or frowned upon. If I’d been popular in high school, I’m sure I would have wanted to do it. But I wasn’t.” … Vanity Fair: You have almost convinced me that pot is boring. Parker: Yeah, probably.