Wednesday, August 5, 2009

Santa Rose Medical Marijuana

Is it time to tax medical pot?


Published: Sunday, August 2, 2009 at 2:52 p.m.

Marijuana is kept in airtight square glass jars underneath a glass
display counter at Sebastopol's medical marijuana dispensary, Peace
in Medicine.

Sales are usually brisk. Staff members answer questions, open jars,
offer smells of the product their "patients" call

Security guards stand by, but for the most part there are few problems.
Executive Director Robert Jacob operates as much in the public eye as
possible. That means regular communication with police and the City
Council and joining such organizations as the Chamber of Commerce.

Now there's one more thing Jacob wants to do: pay taxes.

"I am in full support of working with our city in implementing a tax
measure," Jacob said. "Having a tax allows you to take part in
your local community directly."

Oakland voters overwhelming approved a local sales tax on medical
marijuana sales at dispensaries in a mail-in election July 21, making
the city the first in the nation to tax a substance that the federal
government considers illegal.

Clubs and dispensaries typically operate on a donation fee structure
instead of a strictly priced structure because the law prohibits sales.
The outlets function more as non-profit organizations than businesses.

But that doesn't stop the state from collecting sales tax, which
amounts to about $1.20 for every $1,000 in sales.

The Oakland city tax sets a special business rate for pot clubs and
dispensaries, raising the amount paid on each $1,000 of sales to $18.

Eighty percent of voters approved the tax measure, according to the
Alameda County Registrar of Voters.

Sales at Sebastopol's Peace in Medicine are not subject to
disclosure, but the dispensary serves 10,800 clients, Jacob said. A
second location is being developed at 950 Gravenstein Highway south.

Sebastopol City Councilwoman Kathleen Shaffer said the time is ripe to
talk about taxation.

"I would like to see it legalized and taxed at this point," she
said. "What Oakland has done will probably benefit the

Sebastopol Police Chief Jeff Weaver said the dispensary has not created
additional crime. It was the target of an unsuccessful armed burglary in
May, but the city also had bank and armored car robberies this year.

When it comes to the city's budget and funding for basic services,
such as police, the community will have to decide, he said.

"The community has to decide whether it's comfortable with
marijuana as a source of income. Same as they would have to be
comfortable with a casino or some other non-traditional source of
money," he said.

Marijuana use was legalized for medical purposes in a 1996 California
ballot measure. Cities and counties have been left to individually
evaluate dispensaries, co-ops and clubs, and regulations typically vary
by town.

While Santa Rosa imposes a two-club limit and mandates that each serve
no more than 500 clients, Cotati and Windsor prohibit them altogether.

Unlike in Oakland, where all dispensary owners approved the tax and
campaigned for it, opinion in Sonoma County is split on whether a local
marijuana tax would be appropriate.

Even Jacob, who is supportive of a tax, has qualms.

"It's a sin tax, really," he said, adding that paying a city
tax would mean the dispensary's contributions to such organizations
as the community's Apple Blossom Festival and Sonoma County's
Harmony Festival likely would be reduced.

"A tax would jeopardize our direct contributions to the
community," he said.

As cities search for ways to close budget gaps, council members in both
Sebastopol and Santa Rosa said they are becoming more willing to
consider a local medical marijuana sales tax.

"Clearly it is something that we should be considering, " said
John Sawyer, a Santa Rosa city councilman. "Times are changing and
one of the things that probably needs to change is how we mitigate some
of the impacts to a community" of allowing marijuana dispensaries.

Colleague Gary Wysocky said he also "would definitely be open"
to a tax.

"We need to fund our basic services," he said. "If the
people of California want to have (medical marijuana) and the people of
Santa Rosa want to have it, it's a discussion we need to have."

Councilwoman Jane Bender said she would need to know more about
Oakland's tax before speaking about a similar tax in Santa Rosa.

John Sugg, manager of Sonoma Patient Group in Santa Rosa, said a local
sales tax could be beneficial "if it was something that we could
probably afford."

But the cost would likely have to be passed on to patients, and Sugg is
loathe to create a hardship on them to help the city pay for services.

"More than half of our patients are poor because of being sick and
the other half are just sick, but everyone's on a budget. If the
cost goes up, not everyone would be able to afford it," he said.

Staff at the Organic Cannabis Foundation on East Todd Road did not
return calls for comment.

Santa Rosa Police Chief Tom Schwedhelm said Santa Rosa would be best
served by watching Oakland's experience.

"We would need to look at the data from Oakland as the tax goes into
effect," he said.

Although crimes have been committed in areas near the dispensaries in
Santa Rosa, they have not necessarily been linked to the dispensaries,
he said.

If the Santa Rosa City Council took up a discussion of a pot tax, Sugg
said he likely would ask to expand his operation, currently limited to
500 clients.

Paying a tax under those limitations, he said, would "make it more
difficult for us."

You can reach Staff Writer Laura Norton at 521-5220 or pressdemocrat. com.

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