Richmond considers tax on large-scale pot growers

July 27, 2010 12:00:00 AM PDT
Medical marijuana advocates and the Richmond City Council have been debating everything from how many pot clubs should be allowed in that city to how much of a tax those clubs should pay.

Advocates around the Bay Area are watching this debate closely because the ramifications of the tax measure could potentially be far reaching. More than 30 speakers were lined up to speak about medical marijuana on Tuesday night.

"As far as I'm concerned, all of these existing operators are nothing but illegal drug dealers until they become legalized," said Richmond City Council member Tom Butt.

That was what Richmond City Council's leading critic on marijuana dispensaries said. It has only been a week since the city passed the first reading of its first law ever regulating pot clubs and the debate still goes on.

"I'm really concerned about where we're going as a nation," said one speaker.

"There are many over-the-counter medications with more health risks than cannabis," said another.

How many pot clubs is too many? Richmond has eight dispensaries, but the new law sets no limits on the number of clubs allowed.

"I don't know what is so unique about Richmond that it needs more per capita than any other city," said Butt.

The number of pot clubs in Richmond could change and the City Council is also considering following in Oakland's footsteps, which just became the first city to allow large-scale, warehouse-style pot growing for medical use.

And like Oakland, Richmond may also ask voters to decide whether to tax pot clubs a 10 percent business tax. That, too, has sparked a fight here.

"Going forward, the city has to make restrictions. There cannot be clubs out there operating that skirt the law," said Lisa Hirschhorn from the Grandaddy Purp Collective.

"It'd be disastrous, the proposal is to put 10 percent on top of a 9.75 percent sales tax we already pay," said John Clay from the Pacific Alternative Health Center.

Observers say Richmond's tax would be the stiffest in the state and even though Oakland has led the charge on medical marijuana, advocates there will be watching Richmond closely.

"What is best for all communities and for growers is that there be tax parity where local jurisdictions charge the same tax rates," said Steve DeAngelo from the Harborside Health Center in Oakland.

Part of the concern some in cities like Oakland is that if surrounding cities have a lower tax, the patients will travel to the cheaper areas to buy their drug and that would mean places like Oakland could be losing out on big business. However, that element of the debate remains to be seen as the debate continues.

At the end of the night, the City Council voted to limit the number of pot clubs which can operate within the city to three.

There are no guarantees that any of Richmond's existing clubs will remain open.

The council also approved putting a measure on the November ballot to determine if pot clubs should pay a tax on their gross sales.


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