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4.) In California, taxes on
dispensaries pay for raids on
Elected officials aren't the only people capable of making crappy drug policy. The public is pretty good at it, too. In 2011, voters in Vallejo, California approved Measure C, a ballot initiative that allows the city to tax dispensaries "up to 10% of their gross receipts plus a base tax of $500 (adjusted yearly for changes in the Consumer Price Index) for conducting business within the City."
But while Measure C gave Vallejo the power to tax dispensaries, it didn't legalize them within city limits. "Measure C does not legalize, authorize, regulate or otherwise permit medical or recreational marijuana businesses in Vallejo," reads an FAQ published by the city in the leadup to the vote on the measure. "Measure C would create a local revenue source by allowing the City Council to impose a business license tax on marijuana businesses. Measure C does not set up a regulatory structure for marijuana businesses and they would still be required to comply with the Vallejo Municipal Code to lawfully operate within the City."
Because Measure C did not legalize the sale of marijuana in Vallejo, dispensary taxes were essentially being used (in conjunction with federal funds) to pay for dispensary raids. As of August of this year, Vallejo police--in conjunction with the DEA--had shut down almost all of Vallejo's two dozen medical marijuana dispensaries. While Measure C was seen as a step in the right direction, it was a nail in the dispensary industry's coffin — and the industry had to pay for it.