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DEA raids, what do we get? Another day older and...

Skaidra Smith-Heisters
February 14, 2008, 5:58pm

The federal government should "honor California law and respect state-sanctioned dispensaries so medical marijuana patients can treat their pain, pay their taxes, and live in peace," say Betty Yee, chair of the State Board of Equalization and State Senator Carole Migden. Wait, pay their taxes? In today's San Francisco Chronicle, Yee and Migden put some numbers on lost taxes and jobs as a result of DEA raids on state-sanctioned medical marijuana dispensaries:
[M]ost of the dispensary operators who have contacted the State Board of Equalization for information about how to obtain seller's permits for collecting and remitting sales taxes are not fugitives, but responsible persons willing to abide by the laws to conduct their businesses.
For example, the Compassion Center for Alameda County was licensed by Alameda County. It paid $3 million in sales taxes prior to being shut down by the DEA at the end of October. The center had employed about 50 workers who earned a living wage and were provided health benefits, unemployment insurance and workers' compensation coverage. Take another example. Nature's Medicinal in Bakersfield had been licensed by Kern County. It paid almost $1 million in taxes until its closure in 2007, including $203,000 in federal and state income taxes, $365,000 in payroll taxes and $427,000 in sales taxes. Nature's had 25 employees: eight were indicted, and the rest were left unemployed and without health insurance after the raid.
Multiply these examples by the 300 medical cannabis businesses of which the DEA has sent letters to landlords, and what do we get? Millions of dollars in lost tax revenue for the state and municipalities, thousands are well-paying jobs with benefits disappearing from our economy, and scores of dispensaries forced to close or move underground for unregulated operations.
More on the lost revenue to the state as a result of the DEA seizing dispensary bank accounts here. (Oddly enough, the article, bearing BoE member Yee's name as co-author, appears to quote directly from CA NORML's December press release on the same topic.) I'm certainly not going to advocate that California look to close the budget gap by taxing medical marijuana patients, but state legislators should at least put a stop to state and local law enforcement participation in the federal raids. The paychecks they save could be their own.

Skaidra Smith-Heisters is Policy Analyst


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