Oakland voters approve marijuana tax

It is the first US city to assess such a tax, which could raise almost $300,000 in revenue next year. Opponents of the measure say it opens the door to more crime and heavier drug use.

Oakland, Calif., on Tuesday became the first city in the US to assess a tax on marijuana.

State and national advocates of the tax say the victory is a significant turning point in the history of cannabis use, paving the way for taxation in other communities and states and establishing more social acceptance of marijuana use.

Opponents say an irreversible threshold has been crossed, opening the door to more crime and heavier drug use.

By a wide margin of 80 percent to 20 percent, Oakland voters said "yes" to Measure F, which asked: "Shall City of Oakland's business tax, which currently imposes a tax rate of $1.20 per $1,000 on 'cannabis business' gross receipts, be amended to establish a new tax rate of $18 per $1,000 of gross receipts?"

"The voters of Oakland have sent a message to the nation that cannabis is better treated as a legitimate, tax-paying business than as a cause of crime and futile law-enforcement expenditures," says Dale Gieringer, California state coordinator for the National Organization for the Reform of Marijuana Laws.

The city estimates that the measure will raise $294,000 in additional tax revenue in 2010 and more in future years. Some say the measure will provide funds to help offset the city's current $83 million deficit as well as allow police to direct their limited resources to more serious crimes and drug offenses.

"The public is more interested in having money to preserve social services and fight more important crimes," says Sam Singer, a Berkeley resident and well-known PR consultant.

Mr. Singer and others say that since the passage of Proposition 218 in 1996 – which made marijuana available by prescription to relieve pain and nausea – marijuana use in California has existed behind a "false front": Users can go to a doctor, complain of symptoms, and for about $100, get the doctor to write them a prescription for the drug. A state-issued card lasts for one year.

"It's so easy to get a card that it's almost as if physicians will help lead you to your story of chronic pain, insomnia, fatigue, etc.," says John Diaz, editorial page editor of the San Francisco Chronicle.

Oakland has not so much cleared up the marijuana issue so much as found a way to contain it, Mr. Diaz says. The city is giving permits to only four clubs, compared with a few dozen in San Francisco and about 800 in Los Angeles.

Federal law still prohibits the use and sale of marijuana, although US Attorney General Eric Holder has said that federal law enforcement will no longer conduct raids in the states that have legalized medical-marijuana use. Nationwide, about 775,000 people were arrested for marijuana possession in 2007.

"It takes a lot of time, attention, and money to bust, prosecute, and then incarcerate marijuana users," Singer says. "Given the economy, this is a move that will be welcomed not just in Oakland, but most likely in major urban cities across the nation."

Some residents in nearby communities are not happy with the Oakland vote.

"I am happy to forfeit the tax money and keep it illegal," says Trygve Mikkelsen, a Norwegian immigrant living on the Berkeley-Oakland border. The owner of a wine-rack business, Mr. Mikkelsen worked on the San Francisco waterfront in the 1970s and '80s around some people who used cannabis every day. "I preferred not to work next to them, preferred to have conversations with other individuals since they were affected by the drug," he says.

The father of three is convinced that younger people will have more access to marijuana. "I prefer that it is difficult to get a hold of and an illegal substance," he says.

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