New Marijuana Tax In Los Angeles

Marijuana Tax

There were a total of 372 medical marijuana dispensaries that filed for their business tax paperwork with Los Angeles city’s office of finance before the Oct. 31 deadline.  This form is in preparation for paying the new pot tax.  Los Angeles is known for it’s many dispensaries, actually more than any other city, but not all dispensaries have filed for the new pot tax, 372 is just the number that want to been seen as following the city’s rules.

Asha Greenberg, the assistant city attorney who has overseen attempts to shut down illegal stores, said she believes there are at least 500. “I do hear of new ones opening up every day, either from the police department or from irate neighbors,” she said.

The  police first tried to figure out how many dispensaries were in the city in 2005.  During that year the police only found 4, which increased significantly the next year when police found 98.  In 2007, the city required dispensaries to register to stay open during a moratorium, in which 186 followed. About two years ago, city officials believe the total number of dispensaries may reach around 850.

In March, L.A. voters approved Measure M, which requires dispensaries to pay a 5% business tax on gross receipts, 10 times more than the next-highest business rate. Janice Hahn, who was then on the City Council, proposed the tax and estimated it would raise at least $10 million. Cannabis businesses will have to pay the tax for this year at the end of February.

The City Council, however, is expected to debate a ban on all dispensaries as soon as January. A recent appeals court decision raised doubts about whether the city has the power to impose significant public safety regulations, such as restrictions on locations. And the ruling also thwarted the city’s plans to cap the number of dispensaries at 100 through a lottery.

But a ban wouldn’t stop the city from collecting the tax from dispensaries that choose to ignore it. “There is considerable precedent around the country and at the state level for collecting taxes even on illegal businesses,” said Jane Usher, a special assistant city attorney.

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