Out of Control Policy Blog

DEA raids California tax coffers

From Dale Gieringer:

DEA raids on California's medical marijuana dispensaries are costing the state's taxpayers millions of dollars in lost revenues, according to records collected by California NORML.

The DEA has not only closed facilities that were paying millions of dollars yearly in sales taxes, but also seized as much as $450,000 in sales tax payments that were in transit to the state Board of Equalization.

The tally includes a $348,078.49 bank transfer to the Board of Equalization stopped when the DEA raided and seized the bank account of an Alameda County medical marijuana dispensary October 30, a $51,935 check to the state BOE that bounced when the DEA seized the bank account of a Kern County dispensary in May, and others.

Keep in mind, those figures are only account for medical marijuana dispensaries lawfully filing state taxes--or at least attempting to!

In November, California Attorney General Jerry Brown claimed that the state had eradicated $11.6 billion worth of marijuana in the last year, some 2.9 million marijuana plants grown under conditions presumed illicit. The dollar value in the case of black market marijuana is likely exaggerated--the state's figures generally count worthless seedlings and mature plants alike--but it is still a sizeable crop (California's wine grape harvest is worth about $3 billion annually). Mendocino County supervisors have considered adding marijuana back into their annual agricultural report in order to shed more light on the subject.

Further reading: Jon Gettman's October publication, "Lost Taxes and Other Costs of Marijuana Laws," provides a national perspective on the theoretical value of marijuana taxes, and Dale Gieringer and Richard Lee estimated the tax value of California's medical marijuana market for Oakland's Measure Z Oversight Committee a year ago.

Skaidra Smith-Heisters is Policy Analyst


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