Marijuana: prescription for an ailing economy?

In cities like Oakland and Denver, medical marijuana dispensaries bring in much needed tax revenue.
Written by Sarah Korones, Contributor

Over 15 states have legalized medical marijuana, but the stigma surrounding the drug’s use in medicine has been hard to shake.

The debate may continue for years, but according to the New York Times, one thing seems sure: the industry is working wonders on local economies.

For many cities struggling to balance budgets in an increasingly downtrodden economy, the taxation of medical marijuana has been a key way to generate revenue. In Oakland, taxes on cannabis dispensaries last year totaled over $1.4 million—a number so significant to the city’s economy that Oakland now plans to double the number of dispensaries it licenses.

Michael Cooper reports:

“This is general fund revenue — it all goes into the melting pot,” said David McPherson, the city’s [Oakland’s] tax and revenue administrator. “When you’re making decisions about what to continue keeping or not, it goes into that decision process. If you don’t have that money, then you’re making other decisions about ‘Are we going to close the libraries on Monday?’ ‘Are you going to end up cutting a cop?’ ‘Are you not giving funds to our arts and things that help our kids?’”

Sometimes lost in the discussion of medical marijuana is the extent to which it has become a small but growing source of new tax collections for cities and states that have been struggling to balance their budgets for more than four years now.

Cities in Colorado have experienced similar gains with taxation of medical marijuana. Last year Colorado Springs brought in $700,000 after taxing dispensaries and Denver collected over $3.4 million.

The economic boost adds another factor to the complex debate over medical marijuana. Will the financial success of cities like Oakland and Denver change the nature of the argument?

Cities Turn to a Crop for Cash - Medical Marijuana [via New York Times]

Image: Dank Depot/Flickr

This post was originally published on Smartplanet.com

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