San Jose City Council Approves Medical Marijuana Tax
SAN JOSE (CBS 5 / KCBS / BCN) -- The San Jose City Council Monday voted in favor of implementing a 7 percent tax on medical marijuana facilities approved by a ballot measure voters passed last month.
The tax proposal was introduced by Councilman Pierluigi Oliverio and approved 8-2, with Council members Pete Constant and Rose Herrera dissenting.
"I think Councilman Oliverio has put together a reasonable compromise for a starting place," Mayor Chuck Reed said.
"San Jose does not actually have a procedure to approve any facility today. That's what we're trying to get to as a City Council," explained councilman Pierluigi Olivero before Monday's meeting.
KCBS' Mike Colgan Reports:
He cited the 78 percent voter approval of Measure U as proof that residents wanted medical marijuana collectives to be taxed.
"These collectives must operate as a nonprofit. The only way to figure that out is through financial audits. It's not through whether or not they accept the exchange of currency for the medical cannabis."
The tax will be placed on the planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, and wholesale and retail sales of marijuana in San Jose. By supporters' estimates, the measure could initially generate $1.5 million in revenue per year.
There are 98 facilities in the city.
Revenue collected from the facilities will have to undergo financial audits and will be used to fund city services, such as road-paving, libraries, police, firefighters, parks and senior programs.
More than 100 people turned out for the meeting, many of them medical marijuana patients and advocates asking the city to take their concerns into consideration as part of the regulation process that the council began discussing Monday.
Medical marijuana dispensaries are prohibited under San Jose's municipal code as well as zoning regulations. Some facilities have recently been the target of raids carried out by the Santa Clara County Specialized Enforcement Team, a local multi-agency police force.
At a City Council meeting last month, many claimed that police were using aggressive force to close state law-compliant facilities in the city.
A good part of Monday's meeting encompassed a staff presentation recommending a regulatory framework for medical marijuana retailers.
They proposed regulations that would prohibit marijuana businesses from operating within 600 feet of homes, schools, libraries, parks or daycare centers.
The proposal also suggested limiting the number of dispensaries to 10 and allowing them to operate in an industrial park or commercial zoning district.
Medical marijuana advocates spoke against taxation, arguing that other prescription drugs are not taxed and that any tax rate would exploit the illnesses of medical marijuana patients.
Representatives from the Silicon Valley chapter of Americans for Safe Access, a national organization that works to ensure safe and legal access to medical cannabis and protect patients' rights, called the tax "unacceptable."
They asked the city to consider some of their recommendations, which include permitting up to 100 dispensaries and sanctioning a review authority that would be separate from the Police Department.
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