There is apparently a $242 million shortfall heading into fiscal year 2014-15 according to the City of Los Angeles’ top budget official. The City of Los Angeles imposes a 5% tax on medical marijuana sales. Colorado is projecting $134 million in taxes from recreational and medical marijuana in the next fiscal year. That number admittedly is based on higher tax rates (more than 20%), including sales taxes analagous to what the Board of Equalization charges. And Colorado has a slightly larger population than Los Angeles, of 4 million compared to 5.2 million. Nevertheless, even discounting the Colorado numbers by 40% to account for the disparity in tax rates and population, Los Angeles could stand to earn as much as $80 million in tax revenue from marijuana sales, were it to embrace unfettered access to dispensaries, and stop the fruitless “whack-a-mole” game of shutting down certain select dispensaries. Heavens Forbid the City Council and Mayor Eric Garcetti will embrace such logic. The writing is on the wall. We are going to have legal marijuana in 2016. So why not jump on the train early and collect some much needed tax revenue to improve the city now!
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