Posted at 05:35 PM on Sunday, Nov. 21, 2010
By MARCUS WOHLSEN – Associated Press

As numerous cities get set to levy voter-approved taxes on medical marijuana retailers, some municipalities in Northern California are already moving aggressively toward creating government-sanctioned marijuana farms to help supply them.

Cities hope to rake in even more tax revenue from medical marijuana cultivation, which has remained in the shadows although it has been legal in the state since 1996.

On Monday, Oakland will begin the application process for four permits to run industrial-scale marijuana farms within city limits.

As cities get set to levy taxes on medical marijuana retailers, some localities in Northern California are already moving toward creating government-sanctioned marijuana farms to help supply them.

Californians may have rejected legalizing recreational marijuana, but voters across the state are more than ready to reap revenue from the state’s largest cash crop.

On Election Day, all 10 cities with local measures on their ballots approved new or higher taxes on marijuana sales that put the need for cash above the stigma of a federally banned drug.

The same was true in Colorado, where medical marijuana was approved in 2000. Nine municipalities approved higher sales taxes on medical marijuana products this year. So far, no Colorado town with a marijuana tax question on the ballots has rejected it.
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Calif rejects legal pot, but cities embrace drug

Calif rejects legal pot, but cities embrace drug

Californians may have rejected legalizing recreational marijuana, but voters across the state are more than ready to reap revenue from the state’s largest cash crop.

On Election Day, all 10 cities with local measures on their ballots approved new or higher taxes on marijuana sales that put the need for cash above the stigma of a federally banned drug.

The same was true in Colorado, where medical marijuana was approved in 2000. Nine municipalities approved higher sales taxes on medical marijuana products this year. So far, no Colorado town with a marijuana tax question on the ballots has rejected it.
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California voters send mixed message over marijuana tax

California voters send mixed message over marijuana tax

A curious thing happened in California on Tuesday. As voters rejected Proposition 19, a statewide initiative that promised to tax marijuana, they voted overwhelmingly for local measures to tax marijuana.

Voters in nine California cities passed measures to tax local marijuana establishments, including existing medical pot dispensaries and any recreational weed businesses that would have opened under Proposition 19.

In Sacramento, more than 70 percent of voters imposed a tax of up to 4 percent on the city’s 39 registered dispensaries. And in Santa Barbara and Morro Bay, voters roundly rejected propositions to ban medical pot outlets.

BERKELEY, Calif. — As numerous cities get set to levy voter-approved taxes on medical marijuana retailers, some municipalities in Northern California are already moving aggressively toward creating government-sanctioned marijuana farms to help supply them.

Cities hope to rake in even more tax revenue from medical marijuana cultivation, which has remained in the shadows although it has been legal in the state since 1996.

On Monday, Oakland will begin the application process for four permits to run industrial-scale marijuana farms within city limits.

In Berkeley, a successful ballot measure to allow medical pot cultivation in industrial zones has would-be growers scrambling to score scarce real estate.

Farther north, the Sonoma County wine country town of Sebastopol passed an ordinance Tuesday allowing for the creation of two large gardens for medical marijuana dispensaries, and two more “collective” gardens where patients could grow their own.
IN THE VALLEY

Fresno County officials have had to handle what they call a tremendous increase in marijuana cultivation, with perhaps hundreds of thousands of plants grown. Sheriff Margaret Mims said the increase is due to illegal sales — not legal medicinal use.

Citing recent violence associated with the grows, the Board of Supervisors in September approved an ordinance that banned outdoor medical-marijuana gardens in unincorporated areas. A Fresno County Superior Court judge upheld the ban, but gave backyard growers until midnight Nov. 30 to harvest their crops.

In the city of Fresno, city officials have gone to court to shut down medical marijuana dispensaries that had popped up around the city. One operator, however, has refused to shut down.

Rick Morse, operator of Medmar, a Tower District dispensary, has been held in Fresno County jail after violating a judge’s order to close. He now is being held in jail on charges of attempted kidnapping of the attorney who has pursued the city’s case against him.

Investigators say they believe Morse was trying to place the attorney under citizens arrest and take him to the state Attorney General’s Office in Sacramento.

— The Fresno Bee

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In Eureka, the Humboldt County seat, a committee is taking applications for four medical marijuana cultivation and processing permits to serve as-yet-unopened dispensaries in the city.

All this is taking place even though the state’s medical marijuana laws require any businesses in the medical marijuana trade to operate as nonprofits – and even though the amount of marijuana the cities are authorizing growers to cultivate could net a typical drug trafficker decades in federal prison.

The U.S. Drug Enforcement Administration did not return messages seeking comment on how the agency might respond if the city-approved operations actually started growing pot.

Oakland City Councilmember Rebecca Kaplan, who co-sponsored that city’s cultivation ordinance, said the DEA had contacted her office but only to request copies of the regulations and background materials. She said the agency advised her that they were conducting research into the ways various cities were handling medical marijuana regulation.

“I think that’s a very hopeful sign,” Kaplan said.

California voters earlier this month rejected a ballot proposition that would have legalized marijuana for recreational use, but the already thriving medical marijuana industry shows few signs of decline.

The state’s loose standards for medical marijuana use allow Californians to easily obtain a doctor’s recommendation for the drug. Yet the law provides little guidance for how patients or their caregivers can legally cultivate the drug, which has forced growers underground.

Oakland officials hoped to bring pot growing into the light and curtail the environmental damage, fire danger and crime associated with covert grow houses.

The City Council over the summer authorized four permits for large-scale growing. The permits would not set limits on the amount of pot that could be grown, but growers would have to implement environmental protections, security, labor standards, transparent finances and inventory tracking.

Permit holders would have to pay an annual $211,000 fee as well as a special higher tax rate levied on marijuana businesses by the city.

About 300 individuals and groups have expressed interest in obtaining cultivation or dispensary permits, city records show.

First on that list is Debby Goldsberry, a longtime fixture on the Northern California medical marijuana scene and a founder of Berkeley Patients Group, a pot dispensary in operation for more than 10 years.

Goldsberry said that two-thirds of her dispensary’s patients live in Oakland, indicating a a need for more medical marijuana outlets.

“As an Oakland resident, I’m very interested in expanding any industry that can help our city,” Goldsberry said.

Goldsberry also campaigned for Berkeley’s Measure T, which authorizes up to six 30,000-square-foot growing facilities in the city.

Also on Oakland’s list is a Boston-based company called Pharmasphere Systems. Chief executive David Darlington says the company is not interested in obtaining a permit for itself but in partnering with a grower who would use Pharmasphere’s indoor growing technology.

Right now, the only plant Pharmasphere grows is Madagascar periwinkle, which contains compounds used in chemotherapy to treat some kinds of cancer. But Darlington says the business opportunity presented by medical marijuana outweighs any stigma that might be attached to being associated with pot.

“We clearly think that the risk is manageable and that the market is potentially so large that you can’t ignore it,” he said.
operator, however, has refused to shut down.

How large? An economic analysis prepared for a nonprofit seeking one of the Oakland cultivation permits found that a 100,000 square-foot growing facility could generate up to $71 million in annual sales.

Under the city’s newly approved special 5 percent tax on medical marijuana businesses, sales from just that one facility would result in more than $3.5 million in additional tax revenue.

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