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Oakland City Council Agrees to Tax Marijuana

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The Oakland City Council voted 5-0 to tax medical marijuana dispensaries and growers 5% of their total revenue in a meeting Monday. Under the plan, Oakland will also levy a 10% tax on recreational pot if state voters pass Proposition 19 and legalize the drug in November.

Council members Desley Brooks, Ignacio De La Fuente, Larry Reid, Jane Brunner and Patricia Kernighan voted in favor of the tax plan, which was drafted by Brooks. Rebecca Kaplan, Jean Quan and Nancy Nadel abstained.

Now that the cannabis taxes have been approved by the council, they will be placed on the November ballot for city voters to consider. If those voters approve the taxes, they could generate millions to help to help close the city’s budget gap, which is projected to reach $50 million next year.

But many from the city’s dispensaries argue the taxes are too high and could threaten Oakland’s burgeoning medical marijuana industry–or worse, send patients to Berkeley, where the tax is lower.

“The reality is that the dispensaries are the tested market, the untested market is the cultivation permit, and there is a lot of risk there in terms of cultivating,” said Brooks. “Patients will still get their medicine and they will not go to neighboring cities we need to vote for 5% across the board.”

In a compromise measure, Jean Quan, who is running for mayor, introduced an amendment to lower the dispensary tax to 2.5%–which would be the same as that in neighboring Berkeley–and put a greater burden on the growers. But the proposal failed to generate the five votes needed to pass.

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