Oakland Doubles Marijuana Dispensaries and Fees

Coffeeshop Blue Sky in Oakland

By Ron Crumpton

For six years, the city Oakland had limited the number of medical marijuana dispensaries to four, but last night, the Oakland Public Safety Committee voted unanimously to double that number to eight.

The bad news for dispensary owners, as well as those who wish to become one, is that the annual fees paid by the dispensaries to the city will also double from $30,000 to $60,000.  Along with the increase in annual rates, the new dispensaries would also have to pay a $5000 application fee.

According to the committee, the increase in fees, “realistically represents the cost of regulating the eight dispensaries.” The new application fee would go to pay for the costs the city incurs with these new businesses; the fee would pay for background checks and the review of security, business and building plans.

                    

Next month, if voters approve Measure V, the supplemental sales tax rate paid by medical marijuana clubs will increase from 1.8 percent to 5 percent. This would bring their total sales tax to 12.45 percent as opposed to the 9.25 percent that other Oakland businesses are required to pay.

The City has estimated that this would increase its revenue by $1.4 million. This estimate was based on the original regulation that limited the city to four dispensaries.

In 2009, the four dispensaries reported a 40 percent increase, $28 million, in sales over 2008, but it could have been much more.

Currently one of the four clubs has been shuttered by the city. Of the three remaining, one is on the waterfront and the other two are in the Oaksterdam section of Oakland. There are currently no dispensaries in the North, West or East Oakland.

This costs the city millions in taxes! Many Oakland residents find it easier to go to dispensaries outside of the city limits because they are closer and easier to access than the three dispensaries in the city.  The increase in dispensaries, if more spread out, would allow greater convenience to Oakland patients, and it would mean more taxes finding their way into city coffers.

Councilmember Nancy Nadel said she would even support 12 dispensaries, based on the number of patients in Oakland.

Isn’t it nice to see a city taking positive steps in their medical marijuana program? The question is, what are these new taxes and fees going to mean for patients?