California: $211,000 annual growers liscense fee

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squarepusher

and be prepared to pay up to 8% in taxes

http://www.komonews.com/internal?st=print&id=98707849&path=/news/business


Calif. mom-and-pop pot growers fear 'Wal-Marting' of weed

by LISA LEFF, Associated Press Writer

Originally printed at http://www.komonews.com/news/business/98707849.html

OAKLAND, Calif. (AP) - After weathering the fear of federal prosecution and competition from drug cartels, California's medical marijuana growers see a new threat to their tenuous existence: the "Wal-Marting" of weed.

The Oakland City Council on Tuesday will look at licensing four production plants where pot would be grown, packaged and processed into items ranging from baked goods to body oil. Winning applicants would have to pay $211,000 in annual permit fees, carry $2 million worth of liability insurance and be prepared to devote up to 8 percent of gross sales to taxes.

The move, and fledgling efforts in other California cities to sanction cannabis cultivation for the first time, has some marijuana advocates worried that regulations intended to bring order to the outlaw industry and new revenues to cash-strapped local governments could drive small "mom and pop" growers out of business. They complain that industrial-scale gardens would harm the environment, reduce quality and leave consumers with fewer strains from which to choose.

"Nobody wants to see the McDonald's-ization of cannabis," Dan Scully, one of the 400 "patient-growers" who supply Oakland's largest retail medical marijuana dispensary, Harborside Health Center, grumbled after a City Council committee gave the blueprint preliminary approval last week. "I would compare it to how a small business feels about shutting down its business and going to work at Wal-Mart. Who would be attracted to that?"

The proposal's supporters, including entrepreneurs more disposed to neckties than tie-dye, counter that unregulated growers working in covert warehouses or houses are tax scofflaws more likely to wreak environmental havoc, be motivated purely by profit and produce inferior products.

"The large-scale grow facilities that are being proposed with this ordinance will create hundreds of jobs for the city," said Ryan Indigo Warman, who teaches pot-growing techniques at iGrow, a hydroponics store whose owners plan to apply for one of the four permits. "The ordinance is good for Oakland, and anyone who says otherwise is only protecting their own interests."

Council members Rebecca Kaplan and Larry Reid, who introduced the plan, have pitched it largely as a public safety measure.

The Oakland fire department blames a dramatic rise in the number of electrical fires between 2006 and 2009 in part to marijuana being grown indoors with improperly wired fans and lights. The police department says eight robberies, seven burglaries and two murders have been linked to marijuana grows in the last two years.

Reid and Kaplan also are open about their desire to have the city, which last week laid off 80 police officers to save money, cash in on the medical marijuana industry it has allowed to thrive.

Oakland's four retail marijuana stores did $28 million in business last year, and if sales remain constant, the city would get $1.5 million this year from a dispensary business tax that voters adopted last summer. A similar tax on wholesale pot sales from the permitted grow sites to the dispensaries would bring in more than twice that amount, the city administrator's office has estimated.

"Allowing medical cannabis and medical cannabis products to be produced in a responsible, aboveboard and legitimate way will be a benefit to the patients, to the workers and to the people of Oakland," Kaplan said.

Adding to the anxiety of growers - and the impetus Oakland officials have to get the grow tax in place - is a November state ballot measure to legalize marijuana possession for adult recreational use and authorize local governments to license and tax non-medical pot sales.

If it passes, Proposition 19 is expected to feed the state's hearty appetite for marijuana. Backers of creating the four big indoor gardens say the plan is not dependent on legalization, but would benefit from it.

"The reality is, this is an issue that is going to grow. I would like it to grow here. I would like it to be Oakland business and not the tobacco industry," Councilwoman Jean Quan said.

Regulating the supply side of the business would represent another turning point in California's complicated, 14-year-old relationship with medical marijuana. Although Maine, New Mexico and Rhode Island license nonprofit groups to produce and distribute cannabis, California's law is silent on cultivation other than for individual use.

Even as hundreds of storefront pot dispensaries, marijuana delivery services and THC-laced food products have flourished, the question of where they get their stashes remains murky: Inquiring is considered as impolite as asking someone's income or age.

Industry insiders usually say they rely on a variety of sources, including farmers who grow outdoors in the far northern end of the state, contractors who run sophisticated indoor operations, and customers who grow their own and sell the surplus.

Officials in Berkeley and Long Beach also are moving take the mystery out of medical marijuana production.

The Berkeley City Council last week approved a measure for the November ballot that would authorize the city to license and tax six pot cultivation sites. Companies running the facilities must agree to give away some pot to low-income users, employ organic gardening methods to the extent possible and offset in some way the large amount of electricity needed to grow weed.

Long Beach officials want to reduce the amount of medical marijuana being sold in the city that isn't grown there.

The city is in the process of trying to whittle its more than 90 dispensaries down to no more than 35 marijuana collectives through a lottery. License winners will be required to grow either at their retail sites or elsewhere in Long Beach and to open their books to prove they aren't growing more than enough to supply their members, said Lori Ann Farrell, Long Beach's director of financial management.
 
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greyfx

I would love for it to be legal, but for the government to just exploit it like this pff I say vote no to prop 19. I am an open minded person but practically anyone can get a med card and it should stay med.
 
GanjaAL

GanjaAL

They got us MMJ patients on this one... looks like some of our rights will go bye bye when this passes....... Read the bill people. I am all for legalization but not at the sacrafice of my rights as a patient so people can rec smoke.

Sorry but people need to read this bill like everyone tells us people who are voting NO.



MMJ patients will be loosing our rights if this passes.



Proponents of California's Regulate Control and Tax Cannabis 2010 Initiative (Prop. 19) claim it will have no effect on California's medical marijuana laws, that it "explicitly upholds the rights of medical marijuana patients".

The language of the initiative says otherwise.

Yesterday, Russ Belville stated in a comment to his blog in The Huffington Post that "Prop 19 does nothing to change Prop 215 or your access to your current dispensary." Belville is NORML's Outreach Coordinator and Host of NORML Show Live.

Meanwhile, in an article that is causing quite a stir among proponents of ending marijuana prohibition, Dragonfly De La Luz lists 18 reasons "Pro-Pot Activists" oppose Prop. 19.

Regarding whether or not Prop. 19 will amend or supersede California's medical marijuana laws she had this to say:

While amendments were made ostensibly to prevent the initiative from affecting current medical marijuana law, a careful reading of the initiative reveals that this is not, in fact, the case. Certain medical marijuana laws are exempt from the prohibitions the initiative would enact, while others are glaringly absent.

Cultivation is one such law that is noticeably non-exempt.[17] In spite of the fact that the tax cannabis Web site says otherwise, the only medical marijuana exemptions that the Regulate, Control and Tax Cannabis Initiative actually makes are with regard to possession, consumption and purchase limits, which only ensure that patients would still be allowed to buy medicine at dispensaries. The word “cultivate” is conspicuously absent. Whereas today a person with a doctor’s recommendation has the right to grow up to an unlimited number of plants, the initiative would drastically reduce that number to whatever can fit in a 5’x5’ footprint (around 3-6 plants—per property, not per person). This will force many patients to resort to buying instead of growing their own medicine, because of the inconvenience caused by producing multiple grows a year rather than growing a year’s supply of medicine at one time, as many patients currently do outdoors. And growing indoors—which typically requires special grow lights, an increase in hydro use, and a lot of time and attention—is a comparatively expensive endeavor.

The initiative would further impact medical marijuana patients by banning medicating in the privacy of their own homes if there are minors present, as well as in public (currently perfectly legal[18])—an invaluable liberty to those with painful diseases who would otherwise have to suffer until they got home to relieve their pain.

Finally, the medical marijuana laws that are exempted from this initiative apparently only apply to cities. For medical marijuana patients who live in an area that has county or local government jurisdiction, according to a strict reading of the initiative, medical marijuana laws are not exempt.[19]

The amendments she refers to were made after Comparing California cannabis/marijuana legalization initiatives was published 31 Jul 09 in Examiner.com. This article noted that the proponents of Proposition 19 had manged to get through 14 drafts without exempting medical marijuana patients from any of its provisions: not the unlimited taxes & licensing fees, not the possession & cultivation limits, not the prohibition on smoking in public or in sight of anyone under 18.

The amendments consisted of adding the phrase "except as permitted under Health and Safety Sections 11362.5 and 11362.7 through 11362.9" to the end of Items 7 & 8 under Purposes.

The initiative mentions medical marijuana three times and omits mentioning it once.

The Mentions

The three mentions are Items 6, 7, and 8 in Section 2, B. Purposes.

6. Provide easier, safer access for patients who need cannabis for medical purposes.

The courts will determine that this means Prop. 19 is intended to amend and supersede California's medical marijuana laws; Proposition 215 (H&S 11362.5) and SB 420 (H&S 11362.7-H&S 11362.9).

7. Ensure that if a city decides not to tax and regulate the sale of cannabis, that buying and selling cannabis within that city’s limits remain illegal, but that the city’s citizens still have the right to possess and consume small amounts, except as permitted under Health and Safety Sections 11362.5 and 11362.7 through 11362.9.

8. Ensure that if a city decides it does want to tax and regulate the buying and selling of cannabis (to and from adults only), that a strictly controlled legal system is implemented to oversee and regulate cultivation, distribution, and sales, and that the city will have control over how and how much cannabis can be bought and sold, except as permitted under Health and Safety Sections 11362.5 and 11362.7 through 11362.9.

The first thing to note about these sections is that they are specific to cities. Nowhere does the word "county" appear.

In Item 7, "city" is specified 3 times, every way they know how: "if a city", "that city's limits", "the city's citizens". The rule of thumb is if you say something three times you mean exactly what you said.

This item exempts medical marijuana patients only in cities, and only with regard to how much they may possess and consume. It makes it legal to ban medical marijuana dispensaries, collectives, and delivery services. Unless the city enacts a sin tax, any buying and selling will be illegal.

The Omission

Section C, Intents, has two items.

Item 1 is a list of the laws Prop. 19 is "intended to limit the application and enforcement of". The inclusion of the phrase "including but not limited to the following, whether now existing or adopted in the future" opens the door for the argument to be made that Prop. 19 may (and most likely will) be interpreted to "limit" the "application and enforcement" of the now existing medical marijuana laws.

This interpretation is reinforced by Item 2 under this section, a list of state laws Prop. 19 "is not intended to affect the application or enforcement of".

Note that Item 2 is not open-ended. There is no "including but not limited to" modifier for this Item.

Conspicuously absent from either list are California's medical marijuana laws: Health & Safety Code Sections 11362.5 and 11362.7-11362.9.

These mentions and omissions occur in the 'preamble' of the initiative, titled Findings, Intent and Purposes. Concerns have been expressed regarding how legally binding these sections are and that nowhere in the sections to be added to California's legal code is there any mention of medical marijuana or any exemption for medical marijuana patients and providers.

Exploiting pain and suffering

Nowhere does the initiative exempt medical marijuana cultivators or distributors from the tax.

Proponents of Prop. 19 often argue that everything is taxed. This is not true. Illinois is the only state that taxes prescription pharmaceuticals, and that tax is 1%.

Proponents of Prop. 19 claim they want to tax and regulate marijuana like alcohol. It costs $450 to license a pharmacy in California and between $340-$580 to license a retail alcohol establishment. Long Beach claims 85 medical marijuana dispensaries and charges $14,742 for a license. Oakland has a limit of 4 dispensaries and charges them $30,000 for a license.

Proponents of Prop. 19 argue that it is illegal to consume alcohol in sight of anyone under 21 or in public. California is littered with sidewalk cafes and pizza parlors that serve beer, wine, and mixed drinks in public and in the sight of children.

To date the cities of Oakland (the home or Proposition 19), Sacramento (The State Capital), Long Beach, and Berkeley have announced proposals to tax medical marijuana in order to keep their medical marijuana dispensaries from being shut down should Proposition 19 pass.

The most liberal of these is Berkeley, where medical marijuana patients will pay 7.5% less tax than recreational users, and it will only cost them 2.5% more than the 9.75% in sales tax they're already paying.

Sacramento is proposing a sin tax of between 5% and 10% for recreational users and 2% to 4% for the sick and dying. "We're trying to get ahead of the process," said councilmember Sandy Sheedy, who proposed the ordinance.

Medical marijuana patients use considerably more than recreational users. Irv Rosenfeld receives 11 ounces per month from the federal government. Maine recently determined that it's medical marijuana patients would use 5 ounces per month, on average. The tax on medicine, besides being ethically inconsistent, falls most heavily on the sickest, who tend to be the poorest.

At $400 per ounce, a medical marijuana patient who needs 3 ounces a month will pay $138.60 tax per month in Oakland.

Meanwhile, no city or county in California has reversed itself on a ban or moratorium on medical marijuana dispensaries since Oakland (home of Prop. 19) passed Measure F, the first medical marijuana tax.

Meanwhile, several cases are working through the courts challenging medical marijuana bans, moratoriums, and regulations which are de facto bans, as discriminatory and in violation of California's medical marijuana laws. Passage of Prop 19 will remove any legal basis for these cases.

Taking the 'medical' out of 'marijuana'

Prop. 19 adds five sections to California's Health & Safety Code, §§ 11300-11304.

§11300 is titled Personal Regulation and Controls. Item a) begins with the phrase "Notwithstanding any other provision of law".

This section makes possession of more than an ounce or by anyone under 21 illegal. It also limits non-licensed cultivation to 25 square feet per residence or parcel, not per person.

If the authors of Prop. 19 wanted to protect medical marijuana patients, why did they say "notwithstanding any other provision of law"?

§11301 is titled Commercial Regulations and Controls. It begins with the phrase "Notwithstanding any other provision of state or local law". It prohibits sales to anyone under 21. Nowhere in this section is there any exemption for medical marijuana patients, cultivators, or distributors.

In addition to allowing cities and counties to ban commercial cultivation and sales (including medical marijuana collectives and dispensaries) it states the following:

(g) prohibit and punish through civil fines or other remedies the possession, sale, possession for sale, cultivation, processing, or transportation of cannabis that was not obtained lawfully from a person pursuant to this section or section 11300;

This means that the taxes and fees paid by the licensed commercial cultivators and distributors will be used to eliminate the competition. For example, Oakland (the home of Prop. 19) is in the process of licensing four cultivators to supply the approximately 6,000 pounds per year sold by the four licensed dispensaries. Bay Citizen put it this way:

Growing marijuana can be lucrative, but the city’s proposed new rules would eliminate small-timers. It would cost $5,000 just to apply for a cultivation permit, and a regulatory fee of $211,000 for the lucky winners. If one has the cash, it’s a small price to pay for the right to produce a crop with an estimated retail value of $7 million. The fee pays for regulating cultivation in Oakland, which will include enforcement against the guys with grow lights in their garages and backyard sheds.

The New York times reports that the leading contender for one of these cultivation permits is Jeff Wilcox, a member of the Proposition 19 steering committee. "Mr. Wilcox estimated that AgraMed would cost $20 million to develop."

Reasonable Accommodation

Current California medical marijuana law does not prohibit smoking in public. It is not currently illegal for medical marijuana patients to smoke in public or in sight of anyone under 18:

11362.79. Nothing in this article shall authorize a qualified patient or person with an identification card to engage in the smoking of medical marijuana under any of the following circumstances:

(a) In any place where smoking is prohibited by law.
(b) In or within 1,000 feet of the grounds of a school, recreation center, or
youth center, unless the medical use occurs within a residence.
(c) On a schoolbus.
(d) While in a motor vehicle that is being operated.
(e) While operating a boat.

While debating Keith Kimber on Time4Hemp Chris Conrad stated Prop. 19 would have to win by a wider margin than Prop. 215 in order to supersede it. He reiterated this in an email that was passed around Facebook.

Even if it did conflict with or amend the medical marijuana laws, which it repeatedly does not do, Prop 19 would still have to pass by more than 56% to have any effect on Prop 215, which is highly unlikely.

Conrad is in error. The California Initiative Guide states the following:

If the provisions of two or more measures approved at the same election conflict, those of the measure receiving the highest affirmative vote shall prevail (Cal. Const., art. II, Section 10(b)).

This is not a case of two or more measures in the same election.
 
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squarepusher

wow, so prop 19 would reduce medical patients cultivation limits to the 5x5 space??? holy shit thats bad
 
fractal

fractal

Fuck that, this shit is DONE!

The flower children of the 60s are now fucking us over and salivating over the cash and power that they will have. The fucking hypocrites!

If this pisses you off and you live in california CONTACT ME here with your email address. IF YOU ARE DEDICATED we will meet together and plan a resistance to this bullshit. Probably will start picketing oaksterdam next month, THIS IS A CALL TO RISE UP AND SAY NO.



Sin taxes on a natural gift ? SIN TAXES? WTF??? :confused0054:
 
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Sway

Guest
Yea the end is near...Shits looking really bad, ill most likely be relocating to another med state.. Really sucks that the California cannabis scene is going down the shithole. If u feed your families with your garden now u might want to look into getting out of here..
 
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DazedNconfussed

What chances are there this bill will not pass? I mean there are alot of anti cannabis assholes out there, wouldnt there be a good chance of it not passing?

I just think the idea of marijuana being legal may scare alot of yuppys. Medical marijuana may have persuaded many, but legal recreation use may be a different story.
 
GanjaAL

GanjaAL

I would not count on that... he is launching a major add compaign most likely closer to the day of voting. Everything is building up to it and everyone on both sides is guilty of missleading information.
 
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Budhog

I would not count on that... he is launching a major add compaign most likely closer to the day of voting. Everything is building up to it and everyone on both sides is guilty of missleading information.

That's a pretty thorough poll. If u click the link towards the bottom, it will take u to the actual poll results/breakdown.

Ain't happenin'
 
D

DazedNconfussed

That's a pretty thorough poll. If u click the link towards the bottom, it will take u to the actual poll results/breakdown.

Ain't happenin'

I really hope so....if this pass's all the great growers will move elsewhere and we'll be stuck smoking rags.....
 
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dailychronic

lol if you think four "super" building can supply Oakland. The blackmarket will thrive more than ever. Cops aren't going to get any smarter. Remember Californias the rest of the US hasn't been blessed with your legality or general mindset yet we still grow.

LOL providing the city with lots of jobs. Im sure there going to grow great pot with quality the first concern (sarcasm for all the cannot sense it)
 
G

Gro

government has out and out lied to us since the 30's about MJ.now that they realize they can't stop it they are trying to cut in line in front of the people who have suffered,sacrificed,and and worked all these years to bring mmj to where it is today.they have put in nothing and deserve nothing!they smell money and power and as usual they are going to muscle in on our action.and this shit about us protecting our own interests,......BS.we have done all the work all these years and these greedy fucks think they have a right to it,.......i don't think so.

if this passes it's because the rich and powerful will trick the common idiot into the illusion that he/she is going to benefit from it.and yes,.....many will fall for it.as i have said before,politicians have a vast pool of ignorance to tap into.so if you run into one of these pro prop-19 fools,beat the shit out of them intellectually.they don't like it when you make them feel stupid.:evilgrin0040:
 
K

kushpheen

Its becoming harder to convince our state that this bill will really benefit anybody other than a very few already wealthy people. oakland really doesn't need a couple hundred low wage trimmer jobs supplied by igrow or agramed, especially when they come at the expense of thousands of self employed growers. The effects this would have on our statewide economy will be felt swiftly and harshly by many people and businesses. Not to mention the effects this bill will have on the overall quality, price and selection for the average californian. $211,000 license is sending a clear message to growers, your not welcome here anymore.

I would love to see some people go undercover, get jobs, infiltrate these 4 gardens and bring locusts, mites, thrips, fire and about 50lbs of mexican brick weed pollen to work one day...
 
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