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  1. chillinwill
    A medical marijuana regulation ordinance proposed to the L.A. City Council by City Attorney Carmen Trutanich would cost $36 - $74 million in lost tax revenues plus untold additional enforcement costs, according to an analysis by California NORML.

    The hastily written ordinance, which is being rushed for an early vote in November, would effectively shut down the city's medical marijuana distribution system by banning all sales of marijuana and sharply curtailing collectives' ability to grow and obtain medicine.

    As a result, the city would forfeit millions of dollars in sales tax revenues that are currently being paid by the city's dispensaries. Other cities and counties that regulate dispensaries allow them to sell to their members as non-profit collectives so long as they pay sales taxes.

    California NORML estimates that there are currently some 100,000 to 200,000 medical marijuana patients in the Los Angeles area, generating some $400 - $800 million annually in retail sales. At this rate, banning sales would cost some $36 to $72 million annually in lost sales tax revenues.

    A survey of California dispensaries by California NORML found that they pay an average of $82,000 per year in sales taxes. At this rate, some $74 million per year in sales taxes would be generated by Los Angeles' estimated 900 dispensaries.

    In addition, Cal NORML's survey found that the average dispensary has 7.4 employees, so that closing 900 dispensaries would cost Los Angeles some 6,500 paying jobs.

    No other city or county in California has successfully regulated collectives while banning sales. Contrary to claims by Trutanich, sales to members by non-profit collectives and coops are allowed under state law SB 420 (Health and Safety Code 11362.775) and the attorney general's guidelines.

    The proposed ordinance would effectively make distribution of medical marijuana unviable in L.A. by limiting collectives to a single garden of 100 plants. This would limit collectives to serving a handful of members, requiring tens of thousands of collectives and grows throughout the city. Nothing in state law authorizes such limitations. Most collectives now serve hundreds or thousands of members and draw from many gardens.

    Patient advocates are expected to sue if the proposed ordinance is passed, on the grounds that it would unconstitutionally limit patients' right to collectively cultivate and obtain medicine, as guaranteed under Prop. 215 and SB 420.

    Patients also object to a provision in the ordinance that would ban cannabis extracts and edibles, which are legal under Prop. 215. Oral preparations are especially important for patients who want to avoid the respiratory hazards of smoking. Advocates argue that oral preparations should be available, but should preferably be prepared in county-licensed kitchens with appropriate labeling of contents.

    Cities with successful dispensary regulations, such as Oakland, San Francisco and West Hollywood, are currently collecting millions in taxes and license fees from dispensaries. A recent poll by Mason-Dixon found that 77% of Angelenos favor regulated dispensaries.

    "Los Angeles would be foolish to pass this unworkable, ill-conceived ordinance," says California NORML coordinator Dale Gieringer, "Not only would it cost $36 - $74 million in lost sales taxes and thousands of jobs, but the city can expect serious legal challenges in the courts. The city would be better advised to adopt a system of licensed regulation and taxes, which has proven successful elsewhere in the state."

    Dale Gieringer
    October 25, 2009
    Indy Bay
    http://www.indybay.org/newsitems/2009/10/25/18626702.php

    File can be found at Ill-Conceived L.A. Medical Marijuana Proposal Would Cost $36 - $74 Million In Tax Revenues

Comments

  1. chillinwill
    Re: Ill-Conceived L.A. Medical Marijuana Proposal Would Cost $36 - $74 Million In Tax

    L.A.'s Marijuana Dispensary Ban Could Cost City Millions

    Los Angeles' proposed medical marijuana ordinance -- which would ban the sale of pot at dispensaries -- could cost the city $36 million to $74 million in lost sales tax, according to a marijuana advocacy group.

    Dale Gieringer, coordinator for the California chapter of the National Organization for the Reform of Marijuana Laws (NORML), said the proposed ordinance, supported by L.A. District Attorney Steve Cooley, would "effectively shut down the city's marijuana distribution system by banning all sales of marijuana and sharply curtailing collectives' ability to grow and obtain medicine."

    No other city or county in California has regulated collectives while banning sales, according to NORML.

    Under the proposed ordinance, also prominently backed by L.A. City Attorney Carmen Trutanich, only nonprofit medical marijuana collectives -- groups of qualified patients with physicians' recommendations and their primary caregivers -- would be allowed to cultivate the herb to relieve the symptoms of serious illnesses.

    "Los Angeles would be foolish to pass this unworkable, ill-conceived ordinance," Gieringer said. "Not only would it cost $36 to $74 million in lost sales taxes and thousands of jobs, but the city can expect serious legal challenges in the courts. The city would be better advised to adopt a system of licensed regulation and taxes, which has proven successful elsewhere in the state.

    In Oakland, considered by many a statewide model for the orderly regulation of medical marijuana dispensaries, voters recently passed, with 80 percent of the vote, a special tax on dispensary sales that is expected to put millions of dollars into city coffers. Cities that NORML lauds as having "successful dispensary regulations" also include San Francisco and West Hollywood. According to the pro-pot organization, these city governments are already collecting millions in taxes and license fees from dispensaries.

    A survey by California NORML found the dispensaries pay an average of $82,000 in sales tax. At this rate, some $74 million per year in sales tax would be generated if Los Angeles has 900 dispensaries.

    According to NORML, other cities and counties that regulate dispensaries allow them to sell to their members as nonprofit collectives as long as they pay sales tax. NORML estimates that there are 100,000 to 200,000 medical marijuana patients in the Los Angeles area, generating between $400 million and $800 million annually in retail sales.

    Under the proposed ordinance, which has come under heavy criticism from the medical marijuana community, over-the-counter sales of pot would be outlawed. The collectives would have to be at least 1,000 feet from other collectives, schools, playgrounds, child care facilities, religious institutions, public libraries, public parks, hospitals, and rehab centers.

    The normal committee hearing process is being bypassed so that the L.A. city council can fast-track the vote on the hastily written measure as soon as Nov. 3.

    There are an estimated 800 to 1,000 marijuana dispensaries in L.A. County. A judge recently ruled the city's temporary moratorium banning new dispensaries was invalid.

    NORML said the proposed ordinance would hamper the distribution of medical marijuana in Los Angeles by limiting collectives to a single, 100-plant garden, meaning each dispensary could only serve a handful of members. This would require tens of thousands of collectives and growing operations throughout the city, the pro-pot organization said. According to the group, nothing in state law authorizes such limitations. Most collectives serve hundreds or thousands of members and draw from many gardens.

    NORML also objects to a provision in the ordinance that would ban marijuana extracts and edibles, which enable many patients to ingest the herb without smoking it. Oral preparations are especially important for patients who want to avoid the possible respiratory hazards of smoking.

    Patient advocates are expected to sue if the restrictive proposed ordinance is passed, on the grounds that it would limit patients' rights to collectively cultivate and obtain medicine, as guaranteed under Proposition 215 and Senate Bill 420.

    Last week, a Mason-Dixon poll found that 77 percent of L.A. residents favor regulating marijuana dispensaries rather than banning them.

    By Steve Elliott
    October 26, 2009
    San Francisco Weekly
    http://blogs.sfweekly.com/thesnitch/2009/10/chronic_city_las_ill_conceived.php
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