Pubdate: Sun, 20 Mar 2005
Source: Press Democrat, The (Santa Rosa, CA)
Copyright: 2005 The Press Democrat
Contact:  http://www.pressdemo.com/
Details: http://www.mapinc.org/media/348
Author: Glenda Anderson, The Press Democrat
Cited: North Coast NORML http://www.norcalnorml.com/
Cited: Safe Access Now http://www.safeaccessnow.org/
Bookmark: http://www.mapinc.org/mmj.htm (Cannabis - Medicinal)
Bookmark: http://www.mapinc.org/find?115 (Cannabis - California)

MENDOCINO COUNTY WEIGHS POT TAX

Supervisors look to medical marijuana clubs as source of revenue to
help close $3.5 million budget deficit

The lucrative, as-yet-untaxed medical marijuana industry is attracting
the attention of Mendocino County supervisors in search of revenue.

"There are hundreds of thousands of dollars being funneled through
these (medical marijuana) dispensaries," said Supervisor Jim
Wattenburger.

County supervisors are mulling the idea of regulating and taxing pot
clubs, a suggestion made by Wattenburger last week to help close the
county's estimated $3.5 million deficit.

Mendocino County, already renowned for its illegal marijuana industry,
has seen pot gardens and cannabis clubs blossom in open view following
the 1996 passage of Proposition 215, which legalized the use of
marijuana for medical reasons.

"It's become a major economic driving force," Wattenburger said. "It
needs to be addressed like any other business."

Santa Rosa and Willits also are considering regulating pot clubs, but
their stated motivation is controlling associated nuisances and crime
rather than generating income. Oakland began regulating cannabis clubs
last year.

Because they're not regulated, the number of pot clubs in Mendocino
County is unknown. There were at least three in the Ukiah area until
one was shut down last month after its owner sold pot to an undercover
agent.

Supervisor David Colfax called Wattenburger's proposal to capitalize
on medical pot clubs "a beautiful dream."

"If it were possible, I think it would be a great idea," he said. "I
completely support the idea."

Supervisor Hal Wagenet, like Colfax, said he doubts the county can tax
marijuana, but "I'm interested in exploring it."

Wattenburger's plan was born while he was campaigning door-to-door for
his seat last year. In one north Ukiah neighborhood, he saw pot plants
growing in the back yards of every third house. The ubiquity of
suburban marijuana gardens has raised complaints about their
skunk-like smell and crime, spurring Ukiah officials to work on an
ordinance to limit backyard pot growing.

Wattenburger said a woman he knows told him she made $90,000 tax free
last year growing pot in her back yard.

"She said she takes it to the cannabis club to cash in," he
said.

It won't be so easy for the county to cash in on the crop.

Regulating and taxing medical marijuana locally could be complicated,
maybe even impossible, Wattenburger admitted. While Proposition 215
legalized medical pot in California, the federal government still
considers it illegal. State and local agencies have been reluctant to
get involved because they fear losing their federal funding, he said.

"I don't know the answers. I'm asking that we explore the issue,"
Wattenburger said.

Only state and federal authorities have the power to tax income, but
local jurisdictions can impose license and business fees.

However, license fees are limited. They're supposed to reflect the
actual county cost of regulating businesses. Certain fees can be tied
to income generated by a business, but they generally require voter
approval, said Mendocino County Counsel Peter Klein.

Marijuana advocates largely support efforts to regulate and tax
marijuana.

"I would love to see it happen to help our local economies out," said
Dane Wilkins, executive director of the North Coast chapter of the
National Organization for the Reform of Marijuana Laws.

Chris Conrad, with the Bay Area marijuana advocacy group, Safe Access
Now, said he knows of a cannabis club that already pays sales tax by
including its pot sales with income from its coffee shop. It does not
tell the state some of its income is derived from pot, he said.

If everyone in Mendocino County paid income tax on their pot crops,
legal and illegal, it would generate between $1.5 and $3 million for
the county annually, Wagenet estimated.

Wattenburger expects his request to set up a committee to study the
legalities and liabilities of regulating and taxing medical pot clubs
to be on the board's agenda early next month.
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MAP posted-by: Richard Lake