Marijuana Tax Measure Advances After City Hall Committee Session

The San Diego City Council will vote next month to place the measure on the November ballot.

San Diegans may soon be in line to vote on a ballot measure that would impose sales taxes on the city's marijuana businesses -- if state voters, in November, legalize "recreational" pot use.

City Council members who are advancing the idea toward the November election say it's time San Diego got "ahead of the game".

Right now, it's behind 16 California cities in charging sales taxes on pot outlets, to offset the cost of regulatory and enforcement actions.

“While I'm not holding my breath for the passage of an adult marijuana-use law in the state of California, it is a possibility," said Councilmember Marti Emerald. "So how are we going to address these issues?"

This morning the City Council's Rules Committee endorsed a measure that would provide for an eight to 15 percent tax rate on recreational marijuana sales. 

But its sponsor, Mark Kersey, said the full Council could drop the minimum levy to as low as 1 percent for starters and phase in higher rates. 

San Jose is recouping about $3 million a year from its pot dispensaries. 

But marijuana-use critics say taxation sends the wrong message. 

"Marijuana is a big business with a lot of money to be made by other people,” said Carol Green. “Mostly -- I believe -- at the expense of our children."

While Kersey's proposal would exempt sales tax for "medical marijuana" patients, owners of the city's 14 legal "medicinal" outlets warned that even a rates as low as six percent could prompt more black-market traffic which would put them at economic risk.

“This proposal is a double-edged sword,” said Phil Rath, representing the United Medical Marijuana Coalition – owners of the city’s legally approved medicinal outlets. 

And the Committee heard other cautionary notes. 

“My understanding of the Adult Use of Marijuana Act is it has something in there that contemplates a prohibition on medical marijuana taxes, and contemplates some kind of a tax recoupment system," said attorney and medical marijuana patient Mara Felsen. "And I don't imagine that will be of no cost to the city.” 

For 15 years, the state has been taxing sales at "legal" medicinal pot shops -- the rate in San Diego is eight percent. 

The full Council will review the measure and suggested refinements next month, facing an August 12th deadline to have a proposition ready for the general election.

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