California’s Big Medical Marijuana Cultivation Dilemma

California’s main city is considering joining the marijuana cultivation bandwagon. However, this move has been cautious and with profound consideration of the risks involved. On Tuesday, the Sacramento City voted on a framework to help create rules governing the licensing, regulating, as well as taxing the indoor commercial marijuana gardens. These indoor gardens will grow medical marijuana for the California cannabis business, which includes the 30 licensed dispensaries within the city.

The council and legislation committee proceeded to endorse a parallel move, which is expected to be reviewed at a later date by the council that would then request the voters to increase the Sacramental city’s business occupancy tax currently at 4% to 5% for the commercial marijuana growers. For the tax raise to be effected, it will need a two-third majority vote expected to be held on June this year.

The Political Divide

Sacramento was among the first cities to license medical marijuana stores back in 2010 while at the same time keeping their number small. The city has over the time had a politically tolerant view toward the pot business. On the other hand, it’s neighboring cities as well as the Sacramento County have come up, with strict measures and bans on the cultivation as well as on dispensaries.

In the 2014-15 financial year, Sacramento collected $2.86 million from the 4% tax levied on medical marijuana from dispensaries. Despite the high projection of new revenues once the tax is raised, the City Council members are torn between a plan to license indoor commercial cultivation in city areas set aside for industrial and agricultural use or commercial construction.

This political rift is based on the fact that the proposal intends to keep marijuana cultivation at least 600 feet from learning institutions and public parks which means that the cultivation will be concentrated in two of the eight council districts.

Last month, the Senate approved a bill that was designed to slow the number of cities and counties banning the cultivation of marijuana in California. The measure was taken based on what the lawmakers viewed as a mistake in medical marijuana regulations.

By Emily Gibson

Emily is a graduate from Chicago with a B.A. in Business and Economics. Emily specializes in the biotech and health care sector, but also has a penchant for medical marijuana stocks, mining, retail, and automotive stocks, as well as personal finance and macroeconomic topics of interest.

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