Medical Marijuana Shops Paid $1.6M in Taxes to L.A.

This despite a voter-approved measure bent on restricting the number of pot shops in town.

Medical marijuana dispensaries paid $1.6 million in taxes to the city of Los Angeles. Patch file photo.
Medical marijuana dispensaries paid $1.6 million in taxes to the city of Los Angeles. Patch file photo.

Medical pot shops in Los Angeles recently paid $1.6 million in taxes to the city, despite voter-approved restrictions aimed at greatly reducing the number of authorized medical marijuana dispensaries, according to figures provided by city officials Tuesday.

Proposition D, which was approved last May, limited the number of dispensaries to the roughly 135 that registered with the city prior to September 2007 and placed restrictions on their operation, but pot shops operators have continued applying for tax registration certificates, officials said.

Nearly 300 dispensaries were issued the certificates after July 20, when the proposition took effect, according to Department of Finance General Manager Antoinette Christovale.

Over the years, the city has issued a total of 1,400 tax registration certificates to so-called "medical marijuana collectives," and since the taxation began in 2011, the city has collected $8.6 million from such businesses, Christovale said.

Taxes are due Jan. 1, but businesses have until Feb. 28 of each year to pay them, she said.

The latest $1.6 million in taxes represents the amount collected from medical marijuana collectives since Jan. 1, Christovale said.

Tax registration forms have allowed some medical marijuana shops to pass themselves off as legally operating businesses, City Attorney Mike Feuer said Monday.

Feuer said he has no plans to ask the Finance Department to stop issuing the tax registration certificates, but he will be notifying businesses that received the certificates "over the past year" that they are barred from operating under Proposition D.

Of the 1,400 tax registration certificates issued, 1,140 are listed as active, according to Christovale.

Proposition D also included a tax hike that kicked in on Jan. 1, raising the tax from $50 to $60 per $1,000 of gross receipts generated by medical marijuana collectives.

Feuer has prosecuted more than 300 individuals involved in illegal dispensaries, with 27 pot shops closing due to criminal prosecution filed by his office, a Feuer spokesman said.

"Dozens of defendants" at more than 20 of the locations "have paid fines and are on probation," Rob Wilcox said.

Feuer said this week that about 100 dispensaries in all have closed since the ban, either due to criminal prosecution or voluntarily.

--City News Service

Malcolm Kyle March 12, 2014 at 04:54 AM
Prohibition was flawlessly designed to increase drug use, atomize society, impoverish citizens, spread illness, increase unemployment, destroy lives, imprison productive people, subvert democracy, shred the Constitution, empower the ignorant & brutal, facilitate mass surveillance, destroy the educational system, hold people in ignorance, manipulate and censor the media, and enrich a tiny puritanical minority of mega-millionaires and corporate bosses. Sadly, it has succeeded in all these objectives.
David Ogilvy March 12, 2014 at 12:49 PM
$1.6 mil. That will get you a LOT of pizza, Lisa Sarkin.
david March 12, 2014 at 03:54 PM
And now dozens are closing because they aren't Prop D. compliant, mind you the measure was approved by an overwhelming 22% voter turn out. This apathetic approach to voting needs to stop in Los Angeles, in California, and in the United States of America. Look at Colorado's marijuana tax revenue since January. We are missing out on so much money for public prosperity through this enterprise and we will regret not passing Prop. 19 even more once it is finally legalized recreationally out here also.


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