Pubdate: Thu, 11 Feb 2016
Source: San Francisco Chronicle (CA)
Copyright: 2016 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Melody Gutierrez

SENATOR BACKS STATE SALES TAX ON MEDICAL POT

SACRAMENTO - California would levy a new 15 percent tax on medical 
marijuana sales to enforce new regulations and pay for state 
programs, rehabilitation and parks under a bill introduced Wednesday.

The Marijuana Value Tax Act could bring the state more than $100 
million in new revenue. The tax was anticipated after the state 
passed historic regulations last year that require state and local 
licenses for medical marijuana businesses under the new Bureau of 
Medical Marijuana Regulations.

"Now that there is a long overdue regulatory framework put into 
place, it's time to help fund the areas that are most affected by the 
cultivation - those communities that have long been paying the price 
of the negative effects of cultivation brought on by the 'bad actors' 
who destroy the environment and bring in crime," state Sen. Mike 
McGuire, D-Healdsburg, who authored SB987 and parts of last year's 
marijuana regulations, said in a statement.

California became the first state in the nation to allow for 
medicinal use of marijuana two decades ago. Until last year's 
regulations were signed into law, the billion-dollar industry 
remained largely unregulated.

The Board of Equalization said it anticipates medical marijuana sales 
to increase with the new laws. In 2014, the state took in $50 million 
in sales taxes from 1,623 dispensaries that registered with the Board 
of Equalization and filed taxes.

Marijuana taxes could eventually be higher than 15 percent if the 
bill becomes law. As with sales taxes, cities and counties would be 
able to enact their own local taxes or fees on top of the state's 15 
percent tax.

Under SB987, 30 percent of revenue from the new tax would go to the 
Bureau of Medical Marijuana Regulation, which would then award grants 
to local agencies - such as cities and law enforcement - that provide 
oversight on the cultivation, processing, manufacturing, distribution 
and sale of marijuana.

Another 30 percent of the new tax would go to the state's general 
fund, and 20 percent would go to state parks to help alleviate a $1 
billion deferred maintenance backlog. The state Natural Resources 
Agency would get 10 percent of the marijuana tax to restore public 
and private lands and waterways damaged by marijuana grows. The final 
10 percent would go to counties for drug and alcohol treatment programs.

"I won't say it's not excessive - it is excessive, but it really 
provides a budget for the state to make it a legitimate industry like 
alcohol, tobacco or even gambling," said Eddie Miller, chief strategy 
officer of GreenRush.com, a San Mateo online platform that connects 
patients with local medical marijuana dispensaries. "These are the 
steps necessary to have a quality industry and a safe industry for 
the consumer."

The tax mirrors what is being proposed in one of several ballot 
initiatives aimed at legalizing recreational marijuana use for 
adults. Proponents of recreational marijuana are collecting 
signatures for initiatives they hope to put on the November ballot.

The tax bill needs support from two-thirds of lawmakers in the 
Assembly and state Senate in order to pass, meaning Republicans leery 
of new taxes would have to sign on. Last year's marijuana regulations 
earned bipartisan support.

Former Republican state Sen. George Runner, who is now vice chair of 
the Board of Equalization, has called on the Legislature to create an 
excise tax on medical marijuana sales.

"I'm the first to admit that government is too bloated and that 
Californians are overtaxed," Runner said in a statement last year. 
"But the fundamental question here is who should pay the steep costs 
of marijuana-related activities that include trespass on public 
lands, water theft and unregulated use of pesticides."
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MAP posted-by: Jay Bergstrom