Medical cannabis cooperatives and collectives in Los Angeles should already be paying a “sin tax” of 5% of their gross receipts. The tax was created by Measure M, a voter initiative proposed by the City Council last year. Tax is due effective April 18, 2011. Patients associations can download forms to pay the tax from the city’s web page.

The Measure M tax is almost ten times higher than the next highest business licensing tax in the city. That new expense will almost certainly be passed along to legal patients who comprise the cooperatives and collectives in Los Angeles. Patients and providers resent the extra tax on medical cannabis, because the city’s multi-year regulatory process has yielded one of the most restrictive ordinances in the state and dozens of lawsuits. No one knows when the litigation – both from and against the city – will be resolved. Many legitimate associations are paying huge legal bills and rent on two properties – their current locations and new one that comply with the onerous location restrictions in the embattled ordinance.

Taxing medicine like cigarettes or alcohol is bad public policy. Sick and dying Angelenos should not pay a “sin tax” on medicine their doctors recommended. The city’s ordinance already requires the cooperatives and collectives to pay all of the costs of implementing the ordinance and enforcing the law. Why not just tax these legal associations like every other business in the city? City Council Members and a large majority of voters saw Measure M as quick money from presumably well-heeled “pot dealers.” Too bad legal patients will foot the bill for that misperception.

“A judge barred Los Angeles officials Monday from taking legal action against the landlord of a medical marijuana dispensary that is part of a lawsuit challenging the city’s ordinance. The temporary restraining order came after the city attorney’s office sent letters last month to 45 landlords warning that they were renting to illegal dispensaries and threatening them with an escalating list of penalties, including daily fines, jail time and loss of the occupancy permit…”

Read the entire story online.

Lloyd Pilchen, Esq.

New Litigation Will Challenge LA’s Flawed Medical Marijuana Regulations

From Llyod Pilchen on CALawBlog.com -

“Bewildered and angry describes the reactions of medical marijuana advocates and dispensary operators to the city’s eligibility list, released on August 25, 2010, indicating that only one in four dispensaries will be allowed to move forward in the approval process in the City of Los Angeles. The lopsided result raises profound questions about the city’s medical marijuana ordinance and its implementation, and is sure to multiply the many lawsuits against the city…”

The City Clerk maintains that there is no appeal process for administrative decisions about eligibility, and City Attorney Carmen Trutanich moved quickly to file suit against every ineligible collective – without regards to the individual facts of each case. Lawyers are lining up on both sides. Expect confusion and high legal bills for operators and taxpayers alike. A political solution looks unlikely. Councilmembers Huizar and Reyes told the LA Times they plan to sit this one out.

Patients and advocates worry that newly-elected City Attorney Carmen Trutanich has yet to make any public comment repudiating his processor’s anti-medical cannabis position. In fact, Trutanich’s Senior Advisor Jane Usher told the Los Angeles Neighborhood Council Committee on August 1 that staff in her office could find no legal protection for sales of cannabis, even inside the membership of a legally organized and operated patients’ association.

On August 10, ASA Chief Counsel Joe Elford and I joined representatives of the Greater Los Angeles Collective Alliance (GLACA) in an unprecedented meeting with Ms. Usher and two of the other top eight managers in Trutanich’s office to discuss regulatory solutions for the city. We presented the staff with a new White Paper published by ASA and GLACA and a draft ordinance based on input from the city’s defunct medical cannabis working group. The White Paper explains the justification for storefront collectives and sales of medicine within their membership. It also makes policy recommendations for the city’s final ordinance. Trutanich’s staff listened attentively and asked hard questions – both good signs, but the outcome is uncertain.

It is possible that Carmen Trutanich will disappoint the medical cannabis community, which rallied around his campaign earlier this year, when he returns recommendations to the PLUM Committee this month. If so, patients and advocates will have to work hard persuade committee members to reject his advice and stay the course on developing sensible regulations for Los Angeles. This is important not just because regulations are proven to reduce crime and complaints in communities, but also because they will finally set some standards in a city that has grappled for too long with how best to regulate access to medicine.