Tuesday, November 16, 2010

LA To Decide On Collective Taxation


On November 16, 2010, the Los Angeles City Council passed language that puts a Charter amendment on the March 2011 ballot allowing for a 5% gross receipts tax on all medical cannabis collectives in the City.

When collectives first began forming in LA, many patients agreed that paying our fair share to the City was reasonable. However, at the time Councilmember Dennis Zine had presented a reasonable motion seeking a temporary moratorium on new collectives while the Council drafted permanent regulations. In this September 2006 motion Zine writes,

“a legally existing medical marijuana dispensary is a retail establishment that is open for business in compliance with all applicable laws and regulations… has obtained all necessary licenses and permits and is conducted in a building… for retail occupancy.”

At the time it could not have been more clear that the intention of the Interim Control Ordinance and the future activity of collectives was going to be a retail model like other cities in California. Concurrently, Zine seated a Medical Marijuana Working Group to work on a draft ordinance that followed a retail model similar to that of the Los Angeles County’s ordinance.

Then, eventually comes the first draft from the City Attorney’s office. It could not be more opposite from Councilmember Zine’s motion or the input from the Working Group. The City Attorney, then Rocky Delgadillo and now Carmen Trutanich, argued that State law did not allow for sales but that patients were allowed to farm together and give it away to one another. After a year of arguing between Council and the City Attorney, nearly a thousand dispensaries operating, the moratorium expired and many angry citizens/patients– the Council finally caved and voted in what is called by many “The Worst Local Medical Cannabis Law In The Country.”

The current ordinance is so far from what the City Council mandated as a “legally existing medical marijuana dispensary” that collectives started to sue the City. Soon after the one-week registration period under the new ordinance, the City Attorney filed suit against 141 of these “legally existing” dispensaries citing a change in management as unlawful. The first ruling in these cases will be issued November 29, 2010.

A handful of councilmember’s are now starting to see what advocates had been stating during public comment. We attempted to point out that the ordinance was drafted with the intent of shutting down every collective in the City. We were treated as if we were irrational, didn’t know what we were talking about. The same people seated as advocates by a councilmember on the Working Group were falling on deaf ears.

The Council is now trying to amend the ordinance to stop the City Attorney’s attempt to shut down 141 “legally existing” collectives. As soon as the City Attorney sued these patient groups the City Clerk stopped the rest of the application process halting any other dispensary from moving forward in the licensing process. These collectives will be deemed illegal under the ordinance on December 6, 2010, if the Council does not act to protect them.

In the midst of all of this Councilmember Janice Hahn originally proposed a $500.00 fee on every medical cannabis plant grown by a collective. After hearing from patient advocates Hahn withdrew that motion and then proposed the 5% gross receipts tax, which passed Council vote 10-4. It will be on the ballot March 8, 2010.

The big question for the Medical Cannabis Community is do we support this tax in light of the current political and legal situation around LA’s collectives? How will you vote on this? PAN looks forward to hearing from you.

Image - Degé Coutee of PAN and LA City Councilmember Dennis Zine

copyright © 2010 Degé Coutee