Phoenix City Council Kills Mayor’s Proposed Cannabis TaxBen AdlinOctober 3, 2018
The plan, floated last week by Phoenix Mayor Thelda Williams, offered several possible tax options. Each was so steep that dispensary operators warned it could put licensed shops out of business.
One would’ve established a $280-per-square-foot tax on dispensaries and cultivation sites. Another would tax businesses based on their gross receipts from the past 12 months. And a third would’ve imposed a flat-rate registration tax of $920,000 per cultivation site and $560,000 per dispensary or consumption lounge.
But on Tuesday, facing backlash from businesses and patients who rely on medical cannabis, the City Council nixed the plan. Council members expressed surprise at how suddenly the proposal was introduced, with some even criticizing the mayor’s office.
A couple of council members intensely questioned the mayor and City Manager Ed Zuercher regarding how much time city staff spent researching the measure over the weekend in an attempt to evaluate whether the eight-hour rule had been violated. The rule limits the amount of time city staff can spend on projects that have not been approved by the full Council.
Councilman Sal DiCiccio denounced the new tax to applause from the audience and said that it was obvious the procedure violated the eight-hour rule.
“It’s a way of stuffing it and screwing the public,” he said. “And I’m tired of this kind of shenanigans at City Hall.”
Even those outside the cannabis industry, such as Pat Oglesby, a tax policy expert who’s described himself as supportive of “most cannabis taxes,” balked at the proposal. “That’s prohibition by another name,” Oglesby said on Twitter after the tax plan went public.
Revenue from the proposed tax would have helped fund the city’s police and fire departments. But its opponents, such as Laura A. Bianchi, a cannabis lawyer at Rose Law Group, insisted it was unfair to expect medical marijuana patients to shoulder that expense.
“We were pleased that once the concept of attempting to balance a budget shortfall on the backs of medical marijuana patients was publicly vetted, the Phoenix City Council unanimously decided that it was not a good idea,” Bianchi said in a statement. “Singling out medical marijuana patients for an enormous tax increase seemed incredibly misguided.”