Cannabis Study House - NORML Weekly News in Audio 2007.1.4

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Weekly News in Audio

January 4, 2007

Dutch City Seeks To Expand ‘Coffee Shop’ Model for Cannabis Distribution

Consuming Billions of Dollars of Cannabis Annually, California Loses Out on Tax Revenue

Hawaii: Legal Medical Marijuana Users Decline by 22% in Hawaii

Terneuzen, Holland:
Dutch City Seeks To Expand ‘Coffee Shop’ Model for Cannabis Distribution

Local municipal officials are reportedly considering a plan to auction off licenses for the so-called ‘coffee shops’, the small shops that are permitted to sell marijuana and hashish, in the border town of Terneuzen, across from Belgium on the southwestern tip of The Netherlands.

According to the local paper, between 2,000 and 3,000 customers visit the local shops each day, and many of them are visitors from Belgium and France. The level of business has become an inconvenience for locals, who now have to pay for parking spaces. According to a local Labour Party city alderman, this would permit the town to create new jobs as well as raise millions of dollars for civic improvements to compensate local citizens for the inconvenience.

The problems created by the so-called ‘drug tourists’ has been an issue in other border towns in Holland, where the coffee shops are licensed and tolerated by the Dutch government, although technically they are not legal.

Oakland, CA:
Consuming Billions of Dollars of Cannabis Annually, California Loses Out on Tax Revenue

A new report to the Measure Z policy oversight committee, entitled "Revenue & Taxes from Oakland's Cannabis Economy," has concluded that Californians consume between $870 million and $2 billion worth of medical marijuana each year, but because of federal law, loses most of the $70 million to $120 million in state sales taxes that would otherwise be collected.

According to the report, only a fraction of the current 200-plus medical cannabis dispensaries and collectives pay state sales taxes. A substantial portion of the medical cannabis sales remains off the books because of the fear of federal prosecution. Despite this, a growing number of communities, led by Oakland, have begun to legally regulate and license medical cannabis sales through the dispensaries. Although the federal authorities continue to consider the dispensaries as criminal enterprises, most have lawfully complied with local regulations like other legal businesses.

According to the Oakland business tax office, the city’s medical cannabis dispensaries reported $26 million in revenues in fiscal year 2004. Revenues declined in 2005 when all but two of the dispensaries were forced to close, but revenue is expected to rebound again this year, as two new authorized clubs have opened.

Oakland’s cannabis clubs pay the city an annual licensing fee of $20,000 as well as a business tax of .1% on revenues. Potential revenues for Oakland are estimated as high as $64 million annually.

In addition, many dispensaries also pay substantial payroll taxes to the state. A Modesto dispensary, California Healthcare Collectives, Inc., before being raided and closed by the DEA, reported paying $93,000 per quarter in withheld federal payroll taxes; $25,000 per quarter in state withholding taxes; and $50,000 to $60,000 per month in state sales taxes. Closure of the dispensary has cost the public over $1 million per year in tax revenues.

The report estimated that between 150,000 and 350,000 Californians have been certified to use medical marijuana, representing approximately 10% of all marijuana smokers in the state. According to California NORML, altogether Californians consume nearly $6 billion worth of marijuana per year, which could net the state between $1.5 to $2.5 billion per year if marijuana were taxed and regulated for adult use.

Honolulu, HI:
Hawaii: Legal Medical Marijuana Users Decline by 22% in Hawaii

Following five years of rapid growth in the number of patients legally permitted to use marijuana as a medicine in the state of Hawaii since the law was adopted in 2000, enrollment in the program dropped sharply last year. According to Keith Kamita, administrator of the Narcotics Enforcement Division of the Department of Public Safety, the state agency that runs the medical use program, the number of certified patients has dropped nearly 22% over the last ten months.

Pamela Lichty, head of the Drug Policy Forum of Hawaii, said the cause of the decline in patients is uncertain, but troubling, indicating she suspects there may be fewer physicians willing to certify patients. Lichty’s group has been lobbying the state legislature to move the program out of the Department of Public Safety, a law enforcement agency, to the Department of Health, a more appropriate agency for handling a program for seriously ill patients. Moving the program will encourage more patients to use the program, and will ease the anxiety of physicians who are asked to certify patients, Lichty said.

More than 2,000 patients have been certified for medical use in Hawaii, with more than half of those living on the Big Island. Allegedly one single physician is responsible for 879 patients, more than half of those certified on the Big Island. Certification permits a patient to have up to three mature marijuana plants, four immature plants, and up to one ounce of usable plant material for each mature plant. A patient has to renew his certification each year.

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