Marijuana.com

Plainsman1963

Pot clubs heading for mainstream
01-17-06 | InsideBayArea.Com | Karen Holzmeister

What's next, joining chambers of commerce?
Unincorporated Alameda County's three medical marijuana clinics are on their way to becoming part of the business mainstream.

Last year at about this time, the county awarded prized operating permits to the Cherryland clinics. Now, efforts are under way to:

-Determine whether the clubs will collect

8.75 percent in state and local sales taxes on the pot products they dispense.

-Set up a computer system to regulate the amount of hemp sold, to ensure that sure customers don't stroll from club to club, loading up as they go.

-Possibly review one club's interest in setting up an on-site kitchen to produce cannabis cookies and other products.

The clubs are We Are Hemp on Lewelling Boulevard, Compassionate Caregivers of Alameda County on Mission Boulevard and Garden of Eden on Foothill Boulevard.

Compassionate Caregivers suggested collecting sales tax from its customers, said Bob Swanson, an aide to Alameda County Supervisor Nate Miley, whose district includes Cherryland. The request is under review.

Paying tax on marijuana products helps to legitimize sales, Swanson pointed out. In California, all tangible products are taxable, except food and prescription medication.

While marijuana sales, cultivation and possession are illegal under federal law, states such as California offer limited protection under laws passed in 1996 and 2004.

In large part, marijuana sales and use is regulated locally. In the county's unincorporated areas, customers can buy up to 8 ounces at one location by presenting medical marijuana and photo identification cards.
Winslow Norton, a co-owner of Compassionate Caregivers, declined to comment. Adele Morgan, co-owner of We Are Hemp, could not be reached Monday or Tuesday. Dennis Roberts, an Oakland attorney representing the Garden of Eden, said assessing and paying sales taxes "is a good idea."

The Board of Equalization, which is responsible for administering California's sales- and use-tax programs, "treats medical marijuana as taxable merchandise," spokeswoman Anita Gore said Tuesday.

Medical marijuana sales outlets can register with the Board of Equalization as retailers, and the tax owed to the state would be based on total sales, she explained.

Compassionate Caregivers also is interested in cooking and selling products made with marijuana or marijuana derivatives, Swanson and sheriff's Capt. Dale Amaral confirmed. The proposal would require permits from the county's planning and health departments.

Amaral said his department monitors the sales outlets to ensure they "stick by the rules" established by the county.

One problem is ensuring that each outlet has no more than 20 pounds of marijuana on site. Another is keeping track of operator-provided security at each location, to guarantee safety inside and out.

Sheriff's deputies also follow up on complaints of people smoking marijuana outside outlets and selling their newly purchased marijuana to others on the street.

The county began imposing tighter regulations after cannabis clubs — forced out of other areas — began crowding into unincorporated areas in 2003 and 2004. After seven clubs clustered near each other in Ashland and Cherryland, county supervisors banned additional clinics and eventually decided to limit the number to three.

 

Buzzby

I'd think that it would fall under "prescription medication". That's basically what it is under California law, the only difference being that federal law doesn't allow it to be sold within the standard prescription system. It's medicine and can only be obtained legally with a physician's recommendation: that's a prescription in ever way except in name.

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Tokamak

I agree with you, Buzz. However, I think the main reason medical cannabis providers want to collect and pay sales tax on their products is because it would provide a strong argument for legal legitimacy should the dispensary go to court. Furthermore, it's a way of entrenching medical cannabis into the state's econonmy: if statistics come out that taxes on medical marijuana netted the state millions in revenue, lawmakers may be more inclined to adopt favorable attitudes towards it.

I am a medical user. Personally, I'm all for paying sales tax on the pot I buy at dispensaries, considering that it's convienient, quasi-legal, and often priced at a slight discount compared to street value. Also, I think it sets the right example for total legalization.

Peace.

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