If California Cities Want Pot Tax, They Can’t Ban Grows And Shops

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Some voters in California are wary of Prop 64, the Adult Use of Marijuana Act, because it gives localities the ability to ban ban marijuana shops [§26200(a)]. It also allows them to ban personal outdoor cannabis cultivation [§11362.2(b)(3)]. They cannot ban indoor personal cultivation of six cannabis plants in your home, however [§11362.2(b)(2)].

Never mind that California NORML is tracking over 400 localities that have cultivation bans or are proposing them now. Ignore that bans are happening to outdoor and indoor cultivation now. Forget this is all happening under medical marijuana laws now. Disregard that if you’re not growing for medical, you’re risking felony prison time now.

You’re right. Local bans suck. Banning outdoor cultivation just means more electricity-sucking indoor cultivation. Banning licensed pot shops, grows, and processors just sucks your hometown’s economic growth over to some other town that doesn’t ban.

But what these banning cities and counties don’t realize is that those bans also suck any pot tax dollars right out of their budgets.

California is estimating a billion dollars in tax revenue from legal marijuana. They take administrative costs off the top. How much is that? Nobody knows. Colorado’s are about $16.3 million. California’s got 7 times the population, but I doubt admin costs would multiply that much. Let’s say 6 times, and round up, call it $100 million.

OK, so now we have $900 million, still a decent amount of money. Out of that, in the first year, there are earmarks totaling $25 million for studying impaired driving, public impact, and medical marijuana, plus grants for addiction and mental health treatment, job placement, and revitalizing drug war-ravaged neighborhoods.

From the remaining $875 million, Prop 64 doles out 60 percent ($525 million) for programs that help kids, 20 percent ($175 million) to help restore the environment harmed by illegal grows, and 20 percent for training California Highway Patrol to bust stoned drivers and to offer grants to local cops, fire departments, and public health.

From what I can tell, it costs $3,000 in Washington and $3,000 to $6,000 in Montana per officer to teach them the junk science of busting stoned drivers. Let’s highball it at $6,000 for California. There are 7,200 officers in the CHP. Pretend we’re going to train every one of them. That’s under $44 million, but will call it that and just train another 133 new CHP with the difference.

That leaves a big ol’ $131 million pot pie cooling on the table, wafting delicious revenue aroma to budget-hungry localities. There are 58 counties and 482 cities in California. If we cut them all an equal slice of pie, they’ve got a shade under a quarter million dollars coming their way.

But the localities that ban outdoor personal cultivation or licensed marijuana shops don’t get their quarter million dollar piece of that pot tax pie. Their cops have to go hungry.

[California NORML] Section 34019(f)(3)(C) of the AUMA states that funds will be disbursed through the Board of State and Community Corrections “for making grants to local governments to assist with law enforcement, fire protection, or other local programs addressing public health and safety associated with the implementation of the Control, Regulate and Tax Adult Use of Marijuana Act.”

However, the section goes on to state, “The Board shall not make any grants to local governments which have banned the cultivation, including personal cultivation under Section 11362.2(b)(3) of the Health and Safety Code [outdoors upon the grounds of a private residence], or retail sale of marijuana or marijuana products.

Now these are extremely back-of-the-napkin numbers. CHP isn’t going to train all its officers and it probably doesn’t cost what it costs in Montana. Administrative costs might only be $50 million. Every city and county won’t get equal slices. California may blow away its tax estimates like Oregon has.

But however big that slice of pie is, it is bigger for the other localities when the others aren’t eating. At first, there will be many bans. The cities and counties not banning will then get really big slices of pie. The hungry cities and counties will see their neighbors engorged on pot tax pie. Their voters will wonder why their firehouse isn’t upgraded or why their youth anti-drug program gets no money. Their cops will wonder why they don’t get to buy new toys.

Some of them will recognize that the sooner they drop their bans, the bigger slice of pie they’ll get than if they wait. Some cities will hold out a long time, but most will recognize the sky hasn’t fallen for their neighbors and end their bans. Keep in mind, this whole discussion hasn’t even brought up what the cities can make from their own local pot tax.

But none of that happens if nobody bakes the pie. There are no incentives in Prop 215 for cities to end any bans. Most the tax there is state and local sales tax that disappears into the General Fund. If you don’t like bans, then the only play on the board is to vote yes on Prop 64.

Russ Belville
About Russ Belville 195 Articles
Russ Belville - or "Radical" Russ, as he is known on-air - hosts The Marijuana Agenda, a two-hour live news and talk radio program for the cannabis community, weekdays at 3pm Pacific on MJAgenda.com.  The show is based in Portland, Oregon, but "Radical" Russ has traveled over 300,000 air miles in the past five years, bringing his show to report live from hundreds of cannabis conferences, marijuana expos, hemp festivals, and legalization events in over 70 North American cities.