Some medical pot shops in the city are still allowed to operate due to exceptions in Proposition D, but finance officials said they are unequipped to determine whether a medical marijuana dispensary is in compliance and must leave the potentially complex legal question to be sorted out by city attorneys.
City leaders said collecting taxes while also banning medical marijuana businesses sends a mixed message, prompting them to simply cut off the issuance of any new tax registrations.
[Councilman Joe Buscaino] said by halting the issuance of new tax certificates to dispensaries, the city will be “inhibiting fraudulent activity” and curbing what appears to be an increase in dispensaries despite the enactment of Proposition D. Councilman Marqueece Harris-Dawson said a “mix” of illegal and legal pot shops has “hijacked storefronts” in his district for medical marijuana sales.
The city collected $4.4 million from 447 dispensaries toward the end of last year, even though only an estimated 100 or so dispensaries were thought to be in compliance with Proposition D.
The city collected $5 million in 2014 from 519 tax registration certificate holders that identify themselves as marijuana businesses.
The ordinance adopted today was based on the idea that any newly registered medical marijuana business could not possibly qualify for the exception in Proposition D, which gives immunity to businesses that can show they registered by a certain date and comply with several other requirements.
The ordinance also makes it a misdemeanor for a business operators to lie on an affidavit attesting that the dispensary complies with Proposition D. The ordinance makes filling out the affidavits a part of the process of registration renewal, which is done through the annual payment of taxes.
Read the full story from the Source: LA addressing medical marijuana mixed message on tax collection
