Los Angeles Tax on Medical Marijuana, Measure M (March 2011)

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A City of Los Angeles Tax on Medical Marijuana, Measure M was on the March 8, 2011 ballot for voters in the City of Los Angeles, where it was approved.

Measure M was designed to impose a $50 business tax per $1,000 of gross receipts at each marijuana dispensary in the city. Los Angeles City Councilwoman Janice Hahn estimated that the tax would raise $3 million to $5 million a year. One motivation for seeking new tax revenue by taxing medical marijuana was that the city faced a $319 million budget shortfall for the 2011 fiscal year.

Measure M was one of 10 ballot measures on the March 8, 2011 City of Los Angeles ballot.

Election results

Measure M
Result		Votes	Percentage
a Yes		106,654	59.34%
No		73,074	40.66%

Election results from the Los Angeles City Clerk as of 2:44 a.m. on March 9, 2011

Support

Supporters

The official voter guide arguments in favor of Measure M were signed by Janice Hahn, Paul Koretz and Pat McOsker.

Arguments in favor

City council member Paul Koretz said, "[Measure M] would turn the collectives into nonprofits and drop the price dramatically...And dispensaries themselves are for it because it gives them some stability. They know that the process of dealing with them is a headache for the city.... Hopefully, this is painless to the city residents and will help."

Pat McOsker, president of the United Firefighters of Los Angeles City, Local 112, said, "The city needs revenue. I know that as well as anyone. The voters of California decided (in 1996) that cooperatives are legal. What we're saying is they should pay their fair share (of taxes)."

Opposition

Opponents

"No on Measure M" website logo

• The official voter guide arguments opposing Measure M were signed by Councilwoman Jan Perry, councilman Bernard C. Parks, LAPD Chief Charlie Beck, Sheriff Lee Baca and District Attorney Steve Cooley.

• Stephen Box, a writer for LACityWatch, said, "LA’s City Council seems hell-bent on incurring legal fees with moves such as this. Declaring something illegal and then taxing it sets a bad precedent. Approaching medical as medicine and cooperatives as nonprofits and then taxing them sets a bad precedent. This is an invitation for litigation that LA can’t afford."

• "Americans for Safe Access" spearheaded the building of a coalition to oppose Measure M.

Arguments against

Measure O opponents argued that:

• It is wrong and possibly illegal to tax medicine, and to tax nonprofits.
• If Los Angeles starts to rely on an income stream from medical marijuana dispensaries, it will have an incentive to allow more of them. LAPD chief Beck says, "These (dispensaries) are not good for your neighborhoods. If they become seen as a cash cow to (city officials) that are desperate, they're going to want more of them."
• For those suffering from conditions that are treated by medical marijuana, Measure M would impose a steep penalty, according to "Americans For Safe Access" spokesman Kris Hermes: "The medical marijuana that is sold in Southern California is fairly expensive — in some cases prohibitively expensive — for medical marijuana patients, especially those folks that are on low income or fixed income. To have to pay nearly 15 percent on top of that is very burdensome."
• LAPD Chief Charlie Beck says "I think what we do (if Measure M passes) is we legitimize something that is against the law. Right now the law says we allow it to be dispensed because it's a medicine. We don't tax medicine. ... Let's be consistent. These (dispensaries) are not good for your neighborhoods. If they become seen as a cash cow to (city officials) that are desperate, they're going to want more of them."

Newspaper editorials

"No on Measure M"

• The Los Angeles Daily News opposed Measure M, writing, "There is a false mythology surrounding medical marijuana dispensaries - that they are medical-related businesses serving a few terminal cancer patients and chronically ill people. The truth is that huge amounts of money are being passed through dispensaries because anyone who wants to think up an 'illness' can get the paperwork they need to procure pot. City leaders know this, and they want a cut of the action. It's a legitimate desire, and not as punitive as Measure O...In all likelihood dispensary operators will be happy to pay the tax, as they do in Oakland, despite their putative nonprofit status. Why? Because they know that paying city taxes gives them a legitimacy and a future standing in the battle to legalize marijuana. Until the larger narrative of marijuana as medicine goes up in smoke, the city should operate under the original premise. We hope voters will agree."

• The editorial board of the Los Angeles Times opposed Measure M, saying, "Getting in bed with a quasi-legal industry has drawbacks. If city government became reliant on tax revenue from medical marijuana sellers, city officials would be less likely to pass ordinances restricting their operations and police would be less inclined to raid their establishments to check whether they're really running on a nonprofit basis. A decrease in such scrutiny would encourage more illegal for-profit dispensaries, which draw other kinds of crime."

Legality questioned

In November 2010, the Los Angeles City Attorney's office published a ruling that said that Measure M would not stand because it was illegal as written. According to the city attorney, the measure was illegal because the dispensaries were nonprofits and selling marijuana was a crime. The report concluded, "The proposed measure would be of little or no effect."

Text of measure

The question on the ballot:

Measure M: In order to fund general municipal services, including but not limited to such matters as police protection and crime suppression services, fire prevention and suppression services, park and recreation facilities, and general improvements throughout the City, shall a tax be authorized on marijuana collectives of $50 per $1000 of gross receipts recognizing that the sale of marijuana is illegal?

External links

Suggest a link

• Official Voter Guide/City of Los Angeles/March 8, 2011 election (dead link)
• Measure M ordinance language
• Measure M ballot title
• List of March 8, 2011 ballot measures published on "The City Maven"
• No Tax on Medicine, a website in opposition to Measure M