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Posts published in “Day: March 14, 2009”

Paying its way

Jeff Kropf

There are indicators that the idea of legalizing marijuana, or at least moves in that direction, are starting to take hold. Oregon may be one of the latest, best indicators, because there's now a bill in the Oregon House to create a state-run process for producing and distributing (medical) pot - and reaping state tax money from it as well. It would be a variation on the state's liquor control operation.

Here's the formal description of House Bill 3274:

Directs Department of Human Services to establish and operate marijuana production facility and distribute marijuana to pharmacies for dispensing to medical marijuana cardholders and designated primary caregivers.
Allows pharmacists to dispense marijuana to medical marijuana cardholders and designated primarycaregivers.
Disallows private marijuana grow sites.
Imposes tax of $98 per ounce on marijuana dispensed by pharmacies. Establishes Marijuana Production Facility Fund. Continuously appropriates moneys from fund to department for operation of production facility.

The list of sponsors here is highly interesting. The senators are Ginny Burdick (liberal Portland Democrat), Jeff Kruse (conservative rural Roseburg Republican) and Rick Metsger (rural/Portland area Democrat, considered moderate, and a former and probably future candidate for statewide office). That alone should give an indication that this is no personal windmill, or that the idea seems to be some sort of political third rail. That's even more true of the many House sponsors - 22 of them, approaching half the chamber, running the full gamut, including a bunch of conventional conservative Republicans Dennis Richardson, Ron Maurer, Jim Weidner, minority leader Bruce Hanna), the more moderate members of the caucus (Scott Bruun, Vicki Berger), relatively conservative Democrats (Mike Schaufler), along with caucus-centrist Democrats (Mitch Greenlick, Tina Kotak, Carolyn Tomei). This is a genuinely bipartisan, cross-ideological deal.

What do you want to bet it passes?

And what's the national context?

We posed the question to Allen St. Pierre, the executive director of NORML (the National Organization for Reform of Marijuana Laws), and here's his reply.

To date, no state has formally adopted any taxation scheme for the distribution of medical cannabis.

NM...realizing the likely conflict with federal laws, opted for a ‘self-preservation’ medical cannabis model. The RI legislature is currently re-visiting their 2-year old medical cannabis laws to create a state-authorized distribution system (which, again, raises numerous state/federal issues), but no $ amounts have been discussed re any levied taxes or fees.

In CA...the only state with quasi-retail access to medical cannabis, in some parts of the state, their board of tax equalization has weighed in on possible revenue from medical cannabis; CA’s tax revenue bureacracies (city/county/state), whether they know it or not, have been collecting ‘taxes’ from some of the cannabis sales outlets—often in the form of the state’s junk food tax masking as cannabis tax.

Richard Lee, proprietor of two of Oakland’s five licensed medical cannabis dispensaries told CNBC that his stores paid over $900,000 last year to city, county and state agencies.

Oregon would be breaking ground.