Los Angeles to tax medical marijuana, close down illegal pot shops

By Jijo Jacob | March 09 2011 7:04 AM

Cash-strapped Los Angeles voted on Tuesday to impose a five percent tax on medical marijuana dispensaries, a measure that will raise $10 million a year.

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Richard Lee, founder of Oaksterdam University, looks over medical marijuana plants in a grow room in Oakland, California June 30, 2010.

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In Tuesday's election, voters approved the Measure M, under which the city can collect $50 out of each $1,000 that the dispensaries raise by selling medical marijuana.

The city, which has been in a tough, long fight to reduce the number of medical marijuana dispensaries, has faced strong opposition from advocacy groups. However, several other Californian cities have slapped similar taxes on pot shops.

Meanwhile, the Los Angeles Times has reported that the city attorney has accelerated efforts to close down illegal marijuana shops. The city attorney’s office has asked as many as 140 pot shops to close immediately, the paper reported.

In a letter sent Monday, the office targeted dispensaries that did not file applications to participate in a lottery to choose 100 that will operate in the city, the paper said.

The city had initiated action to close down 439 dispensaries in December last year, but the process was halted as pot shops sued the city over the legality of the ordinance.