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Los Angeles to Shutter Pot Dispensaries, Raise Taxes


 Los Angeles to limit medical marijuana businesses and raise their taxes.

Last month in Los Angeles, California, voters turned out in support of a proposition that limits the Medical Marijuana Businesses (MMBs) in the city to 135 and increases their city tax from $50.00 to $60.00 for each $1,000 of gross receipts. There are currently 700 or more MMBs in Los Angeles.

According to the Fiscal Impact statement by Miguel A. Santana, City Administrative Officer, Los Angeles “received $2.5 million in business taxes from MMBs in 2012. Any revenue loss from the decrease in MMBs may be offset by the increase in the tax rate and the possible shift of business to the remaining MMBs.”

Snapshot

Proposition D actually bans MMBs, but then grants immunity from the ban to the 135 MMBs that have been in operation since September 2007 and that satisfy three earlier registration laws:

  1. They have not ceased operations
  2. They pass annual background checks
  3. They are separated from residential zones, and are at least 1,000 feet away from schools and 600 feet away from parks, child care facilities, and other designated places.

Proposition D also mandates that the dispensaries close at 8 p.m., and that there be at least 600 feet between MMBs. If one of the original 135 MMBs closes, it cannot be replaced by a new medical marijuana dispensary.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.