To hear many local officials talk about it, you’d think those narrow, serrated leaves were made of gold.
Mounting unfunded pension costs? Wonder weed will pay the bills.
Mental health costs rising? Sell more wonder weed.
Worried that public safety won’t have enough cars or cops to fill them? Here’s a grassroots solution – wonder weed!
Never mind glaucoma and nausea, California governments large and small are counting on a cannabis cure for all their ills. And why not?
We’ve heard of medical marijuana dispensary owners carrying garbage bags full of cash. We’ve read that 1.5 million Californians already have medical cards; if they buy an ounce a year ($170 per), that’s $3 billion in sales and $450 million in state excise taxes.
But we’re going to need more than smoke and mirrors to solve all our long-term financial issues – from crumbling roads to runaway pension costs. Even with wonder weed, nothing replaces careful planning and budgeting. Marijuana tax receipts will be only a small part of any solution.
Under Proposition 64, which legalizes recreational sales starting in 2018, counties and cities will be allowed to collect their own marijuana taxes, with most planning to assess around 10 percent on top of state excise and sales taxes. One study puts Stanislaus County’s tax receipts at around $7.4 million a year – a tidy sum. But sober-minded officials know it’s but a blip on the balance sheet.
“The additional revenues will not solve all of the city’s future financial problems,” said Joe Lopez, Modesto’s interim city manager.
Instead of counting on a pot of gold, it’s crucial Stanislaus County and its cities develop a plan to manage this new resource – a plan they don’t yet have. Unfortunately, time is in short supply; so is trust.
Tuesday, Modesto’s city council will hear details of putting a local tax on the November ballot. To do that, they’ll have to pass it by late June or early July. Other entities face the same deadline.
“I’m sick and tired of seeing other jurisdictions take our tax dollars because they set up shop right at our city limits,” said Modesto councilman Tony Madrigal on May 9.
Tax dollars? Only four of the 23 dispensaries operating in Stanislaus County are thought to be paying any taxes – the rest are operating a little more, uh, loosely. Only one “dispensary” – calling itself a church – is within city limits, and it’s been here only a few weeks.
And what’s to keep other cities from competing for dispensaries? That could start a race to the bottom, each city undercutting the others. It’s no way to cash in on the green gusher.
Cities such as Turlock, Waterford and Gustine have already said they won’t allow dispensaries. If weed isn’t available close to home, customers will drive to Modesto then bring it back – perhaps consuming along the way. Those cities will face increased costs for code enforcement, mental health and policing. Without a plan to share taxes, residents in those cities will suffer.
Stanislaus County’s tax study included a plan to divide it. The jurisdiction where the sale took place would keep 60 percent of taxes; the other 40 percent would go to programs benefiting all county residents with a portion going to cities that don’t indulge.
Budding marijuana entrepreneurs would prefer a uniform set of rules, too.
Mark Ponticello co-owns the People’s Remedy dispensary, employing 22 people. He hopes to get into the cultivation side, too. Having to cope with wildly varying rules would be a “nightmare.”
It’s hard for elected officials not to be dazed by visions of a green bonanza after seeing what has happened in Colorado. But being the first to legalize recreational marijuana, the Mile High state is now the Amsterdam of America; a destination for weed eaters and smokers. As more states legalize, people won’t have to travel to indulge. Basing tax projections on Colorado’s example could be a pipe dream.
We trust county officials not only to come up with an equitable plan, but it’s clear most county residents would prefer it. Prop. 64 passed here by the barest of margins – 735 of the 172,000 votes cast. As people become more comfortable with the concept, they are thinking through the logistics.
In a recent poll, 62 percent wanted uniform standards regulating “marijuana activities across all the cities within the county.” Some 56 percent said they should be “identical.”
Such coordination and cooperation should be the gold standard for regulating weed in Stanislaus County. Yes, Modesto should go ahead and put its tax on the ballot, but it should also commit to working with the county and other cities for everyone’s benefit.