Marijuana Tax Returns to Rules

The city collected more than $3.5 million last fiscal year through taxes on medical marijuana collectives. Some city officials want more.

Councilmember Sam Liccardo, along with Rose Herrera and Pierluigi Olivero, put forth a plan Monday to put all medical marijuana collectives not paying their Measure U taxes out of business. According to the city’s Department of Finance, in the past fiscal year, 80 of the 158 medical marijuana dispensaries have “never, or only sporadically, paid the medical marijuana tax approved by voters in 2010 through Measure U.”

The councilmembers signed on to the memo have become increasingly frustrated with the failed efforts to reinforce Measure U taxes after an ordinance to cap collectives was overturned following a successful referendum effort.

“This has left many observers scratching our heads,” Liccardo said in the memo. “After all of the work and resources to pass ballot measures and ordinances to regulate and tax medical marijuana, we still don’t have any mechanism for effective enforcement of those rules.”

The three councilmembers’ memo does commend the dispensaries that “have demonstrated a good faith commitment to fully comply with state and local laws.” The memo goes on to say that these collectives “share the frustration of City Finance officials because the lawless practices of their competitors put them at a financial disadvantage.”

A proposal will be heard at the Rules and Open Government Committee on Wednesday. The proposal offers two options. The first option is to give the city the ability to shut down non-compliant medical marijuana dispensaries and revoke their licenses. The second option would give City Manager Debra Figone the ability to arrange the closure of any business—marijuana-related or not—for not paying taxes and fees. Oversight would be done to ensure due diligence is completed.


    • I, like all who live in San Jose and who don’t take money from the city, love the council members’ idea. Make these businesses pay their fair share. More revenue for the city. Sorry I didn’t respond sooner, but I was at work.

  1. Who is going to shut the places down? There are not enough cops. Call the Feds. I bet you that they would love to come in and make an example of how Prop 209 runs afoul of federal law right here in SJ.

    The will of the voters, was high, high, high, the day that anyone thought attempting to legalize even a gateway drug like marijuana was going to be a good idea.

  2. According to the anti-Measure D argument, wouldn’t collecting the taxes drive these businesses out of San Jose?  I’m hoping so, but I’m not counting on it.

  3. These clubs bring in as much, if not more revenue per annum than the proposed A’s stadium deal… without the cost of land, infrastructure, advertisement etc.

    Even if the A’s pay full boat for the land San Jose spent $300 million on AND fully fund the stadium without municipal funds- San Jose still pays for upgraded sewer, roads, water, traffic control.  Likely far in excess of $3 million, so how long will it take for Rufas Reed’s deal with developers to actually make money for SJ? 

    No one knows, but the federally illegal pot clubs already bring in at least as much without the outlays… and there aren’t even proper laws or enough personnel in place to collect the revenue!  How mismanaged is this City?!?

    • Anonymously,

      MLB won’t bring in as many armed robbers than these collectives do.  The PD, FD, victim assistance, and local hospitals combined probably spend more than 3 million in investigating armed (w/ big, scary guns) robberies at collectives, caring for victims, paying for lost wages, and medical treatment (respectively).

      In addition, the dispensaries draw a lot of lovely individuals to our area.  I bet Reed wouldn’t want these “patients” loitering in his neighborhood. 

      A lot of business owners have gone out of business because these collectives have driven away their clients.

      Why doesn’t anyone request that the PD put out all of the robberies that have occurred at dispensaries?  Lets be transparent.

      Thanks to Reed and company, potent marijuana (not that weak Mexican grass) is now readily accessible to our children. 

      If you want your money…Reed, Figone, Herrera, Liccardo, etc., just take it.  Better yet, ask the voters if you can strong arm these dispensaries like you did when you wanted to strong arm city employees.

      Dispensaries, V and W, measure B….and were still broke?  What a joke…

  4. Sam, Rose and Piero all need to look up “gateway” drug. They dont get this and a lot of other matters for that reason. Wake up voters. The clock is ticking. Lets strart by making a statement in District 8 Rose has to go!