Pubdate: Fri, 30 Oct 2015
Source: Los Angeles Times (CA)
Copyright: 2015 Los Angeles Times
Author: Emily Alpert Reyes


Issuing tax certificates gives a false sense of legitimacy, city lawmakers say.

Los Angeles lawmakers want to stop letting new marijuana shops sign 
up to pay city taxes because they say there is no way the businesses 
could be legal under restrictions approved by voters more than two years ago.

"We shouldn't be making money off of illegal businesses," City 
Councilwoman Nury Martinez said.

The council voted Wednesday to request that City Atty. Mike Feuer ask 
the finance office to stop issuing business tax registration 
certificates to newly established pot shops, one of several proposals 
meant to prevent illegal businesses from using city documents to 
convince customers they are operating with city approval.

Under Prop. D, medical marijuana businesses and the landlords who 
lease to them can be prosecuted if the shops don't meet several 
requirements, including being registered with the city in the past 
and operating far enough from parks and schools.

When the law was passed, city officials estimated that fewer than 140 
pot shops would qualify to avoid prosecution. Yet hundreds more - 447 
marijuana businesses - renewed their registrations to pay business 
taxes this year, obtaining official certificates from the city.

The phenomenon has fueled "the wholesale practice of hiding behind 
city documents to try and fool the public ... that they are in fact 
endorsed by the city," said Sarah Armstrong, director of industry 
affairs for Americans for Safe Access, which advocates for legal 
access to cannabis for therapeutic use.

Finance officials have insisted that they aren't authorized to 
investigate whether a business is legal and that they simply take 
taxpayers at their word. But council members have bristled at the 
idea that the city would continue to register illegal businesses to 
pay business taxes.

Councilman Paul Koretz called it "an unbelievable practice." 
Councilman Marqueece Harris-Dawson said it undermined voter 
confidence for the city to "cooperate" in any way with businesses 
that voters had opposed at the polls. And Councilman Mike Bonin 
compared it with the city registering businesses that sold heroin or 
shark fins.

Martinez says that the finance office should stop issuing tax 
certificates to new marijuana shops. Existing shops could still renew 
their registrations, but city lawmakers want to require them to 
attest under penalty of perjury that they comply with Prop. D beforehand.

In addition, the council wants the finance office to alter the 
registration documents to make it "very clear" that they do not mean 
a marijuana shop is in compliance with Prop. D.

And they want Feuer to prepare a new law making it illegal for pot 
shops to display an expired tax registration certificate or one in a 
different category to mislead the public - two ways that businesses 
that don't comply with Prop. D could try to sidestep the new rules.

City lawyers and finance officials are supposed to report back with 
more details on how they'll make the recommended changes. The 
proposal passed 13 to 0, with two council members absent for the Wednesday vote.
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