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Palm Springs Prepares for New Pot Tax

Palm Springs residents approved a new tax on medical marijuana dispensaries early this month, and providers and patients will soon find out just how big a financial hit that will mean.

On Nov. 5, voters approved Measure B by more than 66 percent, imposing a tax of up to 15 percent on the proceeds of pot shops in the city. The city council is expected to set a tax rate Dec. 4. That day’s meeting will also include discussions about a fourth dispensary in Palm Springs.

First the city must certify the election results, and then officials may be able to levy the tax starting as early as Dec. 4, though officials said they don’t plan to hurry.

Medical Marijuana“We hope we can start to impose it as early as Jan. 1,” said City Attorney Doug Holland, “and give everyone reasonable notice.”

There are currently three dispensaries operating within city limits. The city is auditing them, and is researching the possibility of a fourth, as well as the potential tax rates.

“Certainly we’ll be looking at what other cities have done and what is appropriate,” Mayor Steve Pougnet said. “We’ll be doing some research and looking at things.”

Like many communities in California, Palm Springs is struggling to navigate difficult waters in a state where marijuana law is never clear. Officials hope the tax will impose order and raise up to $1 million a year, depending on the tax rate.

Uncertainty about what that rate will be has made some in the medical weed business uneasy. The cap is 15 percent, but the council could decide to set that rate immediately. Jim Camper, who runs the Organic Solutions of the Desert dispensary, said 15 percent is too steep.

“I hope the city will understand we are now companies trying to do things right after two years of struggling, competing with illegals who operated on a completely different standard,” Camper said, referring to illegal marijuana producers.

Money raised by the weed tax would pay for medical marijuana regulation, law enforcement and firefighting services.

In a city of about 45,000, nearly 20,000 patients are registered at the three licensed dispensaries, according to city officials. Only about a quarter of those are actually from Palm Springs, however; the rest are from the surrounding area.

Every other city in Riverside County, along with the county itself, bans dispensaries outright and at least tries to keep unlicensed shops out. Palm Springs is the only city that licenses and regulates dispensaries, and the only place in the area where patients can go to get their medicine.

About Matt Brooks

Based in San Francisco, Matt is a journalist who has specialized in marijuana policy for more than five years. He provides regular news coverage on marijuanaandthelaw.com and californiamarijuanamarket.com.

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