Long Beach Tax on Medical Marijuana

Long Beach is joining the cities of Berkeley and Sacramento in considering a tax on medical marijuana collectives to help close their budget gaps. Proposed ballot measure would levy a 5% tax on medical pot collectives and another tax of 10% if recreational pot is legalized. But it would require a special election costing up to $450,000.

When Long Beach voters join other Californians in November to decide whether to legalize recreational marijuana, they may also get the chance to decide if it should be taxed. The City Council took a step toward putting a marijuana tax measure on the ballot that would levy a 15 percent tax bumped up from a proposed 10 percent on the recreational drug and a 5 percent tax on medical marijuana. City officials don't know how revenue the tax would raise, but they're looking for every penny to help eliminate an estimated $18.5 million budget deficit in the next fiscal year.

The Los Angeles suburb with a population of almost 500,000 scheduled a public hearing on the drug levy for Aug. 3. If the council later approves the wording, a ballot initiative establishing a 5 percent tax on the city’s 35 dispensaries could go to voters in November, according to Lori Ann Farrell, Long Beach’s director of financial management.

Long Beach joins California cities including the state capital, Sacramento, weighing marijuana taxes to bridge falling revenue from the worst recession since the 1930s. The nation’s largest state by population saw an explosion in the number of marijuana dispensaries after voters approved a 1996 referendum legalizing pot for medicinal use.

Discussion of the tax comes as the state prepares to vote on Proposition 19, a referendum on the November ballot. If approved, the measure would make it legal for anyone age 21 or older to possess one ounce or less of marijuana, and allow local governments to regulate and tax sales. The medical marijuana tax is modeled after one by the City of Oakland, which expects to collect $1 million a year in revenue from its four authorized dispensaries.