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Hard-up Calif., LA mull marijuana tax

(Xinhua)
Updated: 2009-07-17 17:30

LOS ANGELES: The state of California and City of Los Angeles are considering the legalization and taxation of marijuana as a way to reduce their massive budget deficits.

But the proposed effort will face challenges from opponents who insist that the legalization of marijuana would negatively impact the community and lead to more use of harder drugs and increase crime.

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City Councilwoman Janice Hahn is leading the effort to impose a tax on marijuana sales as a way to find new revenues for the city.

The councilwoman made a motion Wednesday to explore the taxation of the revenues of marijuana dispensaries.

"We're always looking for a way to raise more revenue," Hahn said, adding that the tax could bring in millions of dollars.

"The legitimate clinics don't mind this. They feel like it makes them more legitimate, and more a part of the city family," Hahn said.

There are more than 500 marijuana dispensaries in Los Angeles. The city has imposed a moratorium against those dispensaries, but hundreds of clinics have opened anyway in recent months because of a "hardship" exemption in the city ordinance.

The city council is discussing on whether to shut those dispensaries, but Hahn said she would consider legalizing them to gain new tax revenues.

Hahn said the tax is aimed at the approximately 200 clinics that opened legally before the moratorium was approved, and is not intended to legitimize the "hardship" clinics.

Even if Hahn's bill passes the city council, it still will have to be approved by voters before it can be enforced.

Meanwhile, the state is facing a budget deficit of more than US$26 billion and to find new revenues, State Assemblyman Tom Ammiano has proposed a bill to tax marijuana statewide much like alcohol or cigarettes.

The State Board of Equalization estimated that marijuana retail sales would net 990 million dollars from a 50-dollar-per-ounce fee and 392 million dollars in sales taxes.

The bill would allow adults aged 21 and older to legally possess, grow and sell marijuana.

"It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available," Ammiano said.

California is one of the few US states that has legalized marijuana dispensaries for medical purposes. Federal law, however, prohibits dispensaries and the growth of marijuana.

According to Ammiano's proposal, the state could not begin collecting taxes until the federal government legalizes marijuana.

"We can't borrow or slash our way out of this deficit," said Stephen Gutwillig, California director of the Drug Policy Alliance. "The legislature must consider innovative sources of new revenue and marijuana should be at the top of that list."

Meanwhile, marijuana supporters have taken the first official step to collect about 443,000 signatures needed to place The Tax, Regulate and Control Cannabis Act on the November 2010 ballot. The measure would repeal all state and local laws criminalizing marijuana.