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CA Marijuana Init Worth Hundreds of Millions Yearly, State Analysts Say

A California Legislative Analyst's Office report released Tuesday estimates that if Proposition 19, the Tax and Regulate Cannabis marijuana legalization initiative, were to be passed by voters, it could generate "hundreds of millions of dollars a year" in tax revenues in state sales taxes and taxes imposed by counties and municipalities that allowed for taxed and regulated sales and cultivation. Passage of the measure would also lead to reduced costs in state and local law enforcement, courts, and corrections, while not endangering public safety, the report said.

The Legislative Analyst's Office is a non-partisan state agency. Its job is to provide fiscal and policy advice to the state legislature.

The "hundreds of millions of dollars a year" estimate is roughly in line with, although lower than, the State Board of Equalization's estimate that marijuana legalization could bring $1.4 billion a year in taxes and fees in the state. That estimate was based not on Proposition 19, but on an Assembly bill introduced by Tom Ammiano (D-San Francisco) that would have allowed for direct state taxation of marijuana. Under Prop 19, only cities and counties would have the ability to tax and regulate marijuana sales and cultivation -- although the state could, of course, collect a sales tax on anything sold in the state.

"Proposition 19 allows local governments to authorize, regulate, and tax various commercial marijuana-related activities," the report noted. "As discussed below, the state also could authorize, regulate, and tax such activities... we estimate that the state and local governments could eventually collect hundreds of millions of dollars annually in additional revenues."

The report warned, however, that firm estimates were hard to come by because of uncertainties, particularly those surrounding how the federal government would respond to California cities or counties moving forward to tax and regulate recreational marijuana sales.

With California laying off and furloughing state workers, and with California cities and counties doing the same with teachers, firefighters, and police officers because of ongoing budget crises, the Legislative Analyst's Office report is bound to become ammunition for Prop 19 supporters.

Oakland Okays Indoor Medical Marijuana Mega-Farms (FEATURE)

In a marathon session Tuesday night, the Oakland City Council Tuesday approved an historic plan for large-scale indoor marijuana farms, but only after hearing from a cavalcade of medical marijuana patients, growers, and dispensary operators intent on ensuring that small and medium-sized growers are not squeezed out.

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While the ordinance is aimed at medical marijuana, the council, which has endorsed the Proposition 19 tax and regulate cannabis initiative, clearly sees the potential for tax revenues and jobs under a perhaps not-so-distant marijuana legalization in California.

The council passed a proposal that will authorize city officials to issue permits for four indoor marijuana farms to supply the city's four allowed existing medical marijuana dispensaries. The ordinance sets no size limitations. Some would-be medical marijuana cultivation entrepreneurs have proposed growing operations as large as 100,000 square feet.

Applicants for the four permits would submit proposals to the city. Permit holders would have to pay a $211,000 annual fee, as well as any taxes imposed by the city. The city currently taxes dispensaries at 1.8% and has plans to increase that tax to 8%. The large-scale grows would have a similar tax burden.

Councilmember Larry Reid, coauthor of the cultivation ordinance, said the new regulations were designed to ensure that patients receive a high-quality product grown at a safe, regulated, facility. He also cited house fires, robberies, and shootings that have plagued medical marijuana growers in the city, and said small growers or collectives could band together to apply for one of the four cultivation permits.

"I disagree with these folks that say it will be like McDonald's," Reid said. "If I was a patient, I would want to make sure that the medicine I buy and consume was grown in a safe environment. These folks that are out there growing on their own, you don't know what you are getting. That's why we will have some sort of product testing."

"I support this. It's a growing industry," said councilmember and mayoral candidate Jean Quan, before voting against the ordinance because it did not include specific eligibility criteria for the grow operations. "If you're going to have a growing use in the state, even if the state [legalization] proposition doesn't pass, the volume of medical marijuana and high-quality marijuana that is regulated is going to grow. Oakland has been a pioneer in this area."

In response to community concerns, the council voted to take up the issue of regulating medium-sized grows when it returns from summer recess in the fall. The vote also included a decision to defer any crackdown on non-permitted grows until after the first large-scale cultivation permits are issued next year, perhaps as early as January.

The ordinance would not affect patients, who would still be allowed to grow up to 32 square feet, or three-person collectives, which would still be allowed to grow up to 96 square feet.

Concerns about whether the ordinance would eliminate small and medium grows had been growing ever since it passed the council's Public Safety Committee last week. "The ordinance needs to allow for moderate and small size growers -- it shouldn't grant an oligopoly to four extremely large permittees and leave nothing for smaller operators," said Dale Gieringer, executive director of California NORML, before the Tuesday night session. "It's like giving Anheuser-Busch and Miller a monopoly on beer in Oakland. We need some microbrews, too."

"We fully endorse this effort to bring the production side of the medical cannabis industry out of the shadows and into the light and to work to regulate and protect the activity, said Kris Hermes, spokesman for Americans for Safe Access. "However, it should not be the domain of an oligarchy of producers, which will invariably reduce the diversity and will potentially not meet patients needs. The answer is to open the regulatory scheme to small and medium size collectives and producers who wish to be regulated."

That the Oakland medical marijuana community was concerned was understandable, said Hermes. "What they see is the council leaving the way open for large corporations to come in and dominate the market," he said. "In an era of decentralized small and medium sized cultivators, I can see why they're upset. You get better variety from a diverse community of small producer, and if this ordinance deters that activity, that would be a mistake."

"It's great that the city has started this dialogue on cultivation, but we didn't even see a draft of this until just before it went before the Public Safety Committee," said James Anthony, attorney for Harborside Health Center, a large Oakland dispensary. "As a matter of good policy, the city could take a little time to work with the stakeholders on this. It completely ignores the reality of hundreds and hundreds of individual and small collective cultivators who supply something like 12 to 15 pounds a day to Oakland dispensaries. There is no path for them to be regulated, licensed, inspected, and approved. Instead, there are only four marijuana factories of unlimited size. It seems like the ordinance could be amended to include some consideration for small and medium growers to come out of the shadows. Instead, the council just waved its hands in the air and said it would come back later," he said before Tuesday's council meeting.

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Steve Deangelo and James Anthony
"Harborside will apply under that system and try to create space inside its facilities to include as many of our existing 500 growers as we can," said Anthony. "It would be nice to give them an option to come into a regulated system."

The city council heard more of the same Tuesday night, with almost every public speaker calling on the council to address small and medium grows or put off a decision until the issue was addressed. "I support the idea of licensing and regulating cannabis cultivation in Oakland, but I think the council needs to pass a measure that has a way for small and medium growers to participate, 500 of whom are the heart and soul of the Harborside collective," said Harborside founder Steve DeAngelo. "It's not the role of government to pick winners and losers in the marketplace. Let's bring the small and medium-sized growers into the system. Let the market sort out what sort of cultivation it prefers."

"Dispensaries have been waiting three years to be able to cultivate our medicine off-site," said Keith Stevens of the Purple Heart dispensary. "This is an inherently flawed program. For you, the council, to take the right away from the dispensaries and transfer it to commercial ag is absolutely un-American."

"There is no reason to push the little and midsize growers out," Luis Santiago of Homegrown Wellness told the council.

"We consumers support moving toward licensed productions, but we have concerns this particular proposal is monopolistic and anti-competitive," Gieringer told the council. "I urge you to slow down and open the process up to competition."

The council didn't slow down, but it showed that it got the message loud and clear. "We're at a time when the medical cannabis industry is a growing and emerging industry and there is increased demand for permitted production facilities," said Kaplan. "We want to address concerns about fire danger and security, but also to provide opportunities for good paying jobs for local residents and revenue to fund basic public services. I support this ordinance, as well as the directions to return for the permits for the medium facilities."

Oakland has made history yet again. The first city to tax and regulate medical marijuana is now about to become the first city to permit, tax, and regulate industrial-scale marijuana production.

Oakland Okays Mega-Pot Farms

At about 11:15 Pacific time Tuesday night, the Oakland City Council passed an ordinance that would allow for four permitted industrial-scale medical marijuana cultivation facilities. In response to widespread concerns among the medical marijuana community, it also vowed to work on permitting medium-sized grows in the fall and to defer any crackdown on medium-sized grows until after the first large-scale permits are issued in January. Patients can still grow up to 32 square feet and to three-person collectives can still grow up to 96 square feet without permits. Look for a Chronicle feature story on this historic vote to be posted in the morning.

Budget Axe Falls on Stockton Narcs

The California Central Valley city of Stockton has been a poster child for the Great Recession, infamous for its housing developments filled with foreclosed homes, its tent cities along the San Joaquin River, and its horrendous 20% unemployment rate. As joblessness soared and the Central Valley economy withered, so did Stockton and its municipal finances.

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Stockton police union billboard (courtesy Kevin He and Flickr)
Faced with a grinding municipal budget crisis, the city last year laid off 29 police officers. Last month, it laid off 26 more, putting a $3.2 million dent in its $23 million budget deficit. In response, the Stockton Police Department announced Wednesday that it could no longer man its dope squad.

"We absolutely do not have any narcotics officers, narcotics sergeants working any kind of investigative narcotics type cases at this point in time," Officer Pete Smith told Sacramento's Fox40-TV.

That was news to Mayor Ann Johnson. "It distresses me that we've had to go to this extent in terms of reductions in our police department," she told Fox40. But the mayor blamed police for failing to negotiate a way to avoid layoffs. "It's really up to our unions, our police union to come to the table to make concessions so we can save officers or rehire officers. It's all about finances," said Johnston.

Stockton police and their union have fought hard to avoid cutbacks, even as the budget axe decimates other city departments. Before last month's layoffs, the Stockton Police Officers Association launched a billboard campaign, the billboards dripping blood and screaming "People are Being Murdered in Stockton" and "Stop Laying Off Cops."

The cops are resorting to the same sort of scare tactics now, with spokesmen warning of a jump in crime because of the lack of a dope squad. "Drugs are a breeding ground for many other activities," said Smith, "and if these are going more and more unchecked, one would have to speculate that you're going to see a rise across the board in those types of criminal activities."

Time will tell. And perhaps the good citizens of Stockton will come to see that there are better ways to protect the public than spending their money on drug squads.

Nearly 2/3 of New Yorkers Support Medical Marijuana, Poll Finds

A poll released today by the Cornell University Survey Research Institute found that nearly two-thirds (64%) of New Yorkers are in favor of legalizing marijuana for medical use. The poll results are similar to a Quinnipiac poll in February that measured support at 71%.

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New York State House, Albany
Despite broad public support, medical marijuana legislation failed to pass either chamber of the New York legislature this year. For a dozen years, proponents have pushed medical marijuana bills, and twice the Assembly has approved them, only to see them die in the Senate.

That was understandable when the Senate was controlled by Republicans, but is less so now. Among Democrats, 66% support medical marijuana, and so do 68% of unaffiliated voters, while a mere plurality of Republicans (48%) oppose it. When broken down on ideological, as opposed to partisan, lines, 79% of liberals support medical marijuana, as do 63% of moderates. A majority of conservatives (51%), on the other hand, oppose legalizing medical marijuana, but only a slight majority.

Somewhat surprisingly, upstate residents had higher levels of support (67%) than people who live downstate (62%). Men were more likely to support it (67%) than women (61%), and whites were more likely to support it (66%) than non-whites (60%).

Medical marijuana won majority support across every age group, and was 65% or higher for every age group except those over 65, where support declined to 52%. It also won majority support across every income bracket, increasing steadily from 53% among those making less than $30,000 a year to 73% among those making more than $100,000 a year.

Fourteen states and the District of Columbia have approved medical marijuana. Maybe one of these years, legislators in New York will get around to enacting the will of Empire State voters.

Synthetic Cannabinoids: K2/Spice Banned in Missouri

Missouri has become the latest state to ban products containing synthetic cannabinoids, with Gov. Jay Nixon signing into law this week a bill making them and products containing them controlled substances in the state. The law goes into effect August 28.

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''spice'' packet (courtesy wikimedia.org)
Products under names such as K2 and Spice contain the synthetic cannabinoid JWH-018, synthesized by a Clemson University scientist more than a decade ago for research purposes. While the products are marketed as incense, most people buying them use them to achieve a marijuana-like high. Their use has been linked to adverse effects, including vomiting, hallucinations, and agitation.

K2, Spice and similar products began appearing in Europe in 2006 and started showing up in this country last year. They are now banned in most European countries, but not in the US, although the DEA has labeled JWH-018 a "drug of concern."

An increasing number of states are not waiting for the feds to act. This year, K2 was criminalized in Alabama (the same law also outlawed salvia divinorum), Arkansas, Georgia, Kansas, Kentucky, Louisiana (effective August 15), North Dakota, and Tennessee. Similar legislation has been proposed in several more states, including Florida, Illinois, and New York.

Marijuana Legalization: California Pot Price Could Drop to $38 an Ounce, Rand Study Finds

If marijuana were legalized in California, prices could drop dramatically, consumption would increase (although how much is anyone's guess), and tax revenues could either wildly exceed published estimates or come in much lower, according to which sets of assumptions hold true, the RAND Drug Policy Research Center said in a report released Wednesday.

The report, Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets, assumes the cost of indoor marijuana production at no more than $300 to $400 a pound. Under legalization, the retail ounce price could drop to as low as $38 pre-tax, the researchers found.

"There are several reasons to anticipate such a sharp decline," the report said. "First, we anticipate that workers' wages will fall because employers will not have to pay a risk premium to employees for participating in an illegal activity. Second, there will be greater ability to use labor-saving automation, especially in the manicuring stage. Third, production at the level of an entire grow house, or several houses operated together, permits economies of scale not available to grows kept small enough to avoid attracting the attention of not just federal but also local law enforcement. Fourth, assuming that growers avoid attracting federal law-enforcement attention, they will face minimal risk of arrest and forfeiture."

The authors caution that pricing estimates depend on a number of variables, including whether an excise tax is imposed, the degree to which it is collected or evaded, and the degree to which regulatory burdens impose economic costs on producers.

Current retail pot prices in California are from $250 to $400 an ounce for high grade weed, so a $38 ounce is about an 80% price reduction. Such a reduction is assumed to increase the rate of consumption, but as the authors note, "the magnitude of the consumption increase cannot be predicted because prices will fall to levels below those ever studied."

Consumption could also increase because of non-price factors, such as loss of stigma or advertising campaigns. The authors said they "could not rule out" consumption increases of 50% to 100%, which would bring consumption to levels not seen since the late 1970s, the heyday of pot smoking in America.

The state Board of Equalization estimated that legalization could generate $1.4 billion a year in tax revenues, based on the $50 an ounce tax envisioned in legislation sponsored by Assemblyman Tom Ammiano (D-San Francisco). The marijuana legalization initiative, Proposition 19, however, does not include provisions for taxation at the state level, only at the local level, and only if those localities decide to allow taxed and regulated marijuana production and sales.

Those considerations, as well the abovementioned factors of level of taxation and tax evasion and the response of the federal government mean revenue estimates vary wildly and could be dramatically lower or higher than the board's $1.4 billion a year estimate.

"There is considerable uncertainty about the impact that legalizing marijuana in California will have on consumption and public budgets," said Beau Kilmer, the study's lead author and a policy researcher at RAND. "No government has legalized the production and distribution of marijuana for general use, so there is little evidence on which to base any predictions about how this might work in California."

But a fella can dream, can't he?

Press Release: Colorado Petitioners Seek Medical Marijuana Access for PTSD Patients

MEDIA ADVISORY                                                                                                                                               

JULY 6, 2010

Colorado Petitioners Seek Medical Marijuana Access for PTSD Patients

At Rally Tomorrow, Veterans Will Submit Petition to Colorado Health Officials to Add PTSD to State’s Medical Marijuana Law

CONTACT: Brian Vicente, Sensible Colorado: 720-280-4067 or brian@sensiblecolorado.org; or Mike Meno, MPP director of communications: 202-905-2030 or mmeno@mpp.org

 

SOUTH DENVER, COLORADO — Tomorrow, Wednesday, July 7, the medical marijuana advocacy group Sensible Colorado and local veterans will hold a press conference and rally to coincide with the official submission of a petition to the Colorado Department of Public Health and Environment that would add post-traumatic stress disorder, or PTSD, to the list of conditions eligible for medical marijuana recommendations in Colorado. The petition is being filed on behalf of Denver resident Kevin Grimsinger, a retired Army sergeant who served in Kosovo, Operation Desert Storm and Afghanistan. As detailed in a recent Denver Post article, Grimsinger suffers from PTSD related to stepping on a landmine in Afghanistan. Numerous studies, including a 2007 study in the Journal of Traumatic Stress, have found that marijuana can be an effective treatment for severe PTSD symptoms—a condition suffered by 20 percent of soldiers returning home from Iraq and Afghanistan, according to 2008 RAND Corporation study.

         Despite such findings, earlier this year, the Colorado Department of Public Health and Environment actively lobbied members of the state legislature to oppose an amendment that would have allowed individuals diagnosed with post-traumatic stress disorder to have access to medical marijuana, if they have a recommendation from a psychiatrist. In 2009, the New Mexico Department of Health added PTSD to the list of qualifying conditions for medical marijuana patients in that state after a recommendation of approval from an advisory board of eight medical practitioners, who examined the evidence and determined that the use of marijuana by patients with PTSD could be a beneficial treatment option, if used in accordance with a recommendation from a psychiatrist.

         WHAT: Press conference and rally to support medical marijuana access for PTSD patients

         WHEN: Wednesday, July 7, at 11 a.m.

         WHERE: 4300 Cherry Creek Drive, South Denver (CO Dept. of Public Health and Environment)

         With more than 124,000 members and supporters nationwide, the Marijuana Policy Project is the largest marijuana policy reform organization in the United States. For more information, please visit www.mpp.org.

####

Location: 
Denver, CO
United States

Press Conference and Rally to Support Medical Marijuana Access for PTSD Victims

Sensible Colorado and local veterans have teamed up to submit an official petition to the Colorado Department of Public Health and Environment to add Post-Traumatic Stress Disorder, known as PTSD, to the list of conditions eligible for medical marijuana recommendations. Please attend this rally and press conference to support this important cause!
Date: 
Wed, 07/07/2010 - 10:30am
Location: 
4300 Cherry Creek Drive, South
Denver, CO 80246
United States

Help Vets: Reform Events THIS WEEK

Get Active! 

Marijuana Reform Events this Week.

 

 

Help our Veterans

 

(1) Press Conference and Rally to Support Medical Marijuana Access for PTSD Victims

 

 WHAT:  Sensible Colorado and local veterans have teamed up to submit an official petition to the Colorado Department of Public Health and Environment to add Post-Traumatic Stress Disorder, known as PTSD, to the list of conditions eligible for medical marijuana recommendations.  On submission day we will be holding a rally and press conference to support this important cause!

WHEN: Wednesday July 7, 2010 at 10:30 a.m.

WHERE: 4300 Cherry Creek Drive, South, Denver, CO (Colorado Department of Public Health and Environment)

HOW YOU CAN HELP:  Attend the Rally!  Tell your friends!  Forward this email! 

 

(2)  Sensible Colorado Fundraiser at Quixote's in Denver

 WHAT:  Music, Legal and Educational Seminars, BBQ and more!  Proceeds to benefit Sensible Colorado and event organized by Denver Relief.  Click for more info HERE

WHEN:  Sunday, July 11 from 2:00pm to Midnight (legal seminars begin at 6:00pm)

WHERE:  Quixote's True Blue, 2151 Lawrence St., Denver 80205

 

(3) Medical Marijuana Update: 

 Please note that the Health Department has developed new "patient application forms" which are available HERE.  We suggest that all new patients and renewals begin using these forms immediately.

 

 

 

Location: 
Denver, CO
United States

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