Oakland's pot tax cultivates efforts in other California cities

OAKLAND, Calif. — Bill O'Donnell illegally self-medicated with marijuana for years for a combat injury and post-traumatic stress from military service in Vietnam — landing him in jail once for possession.

Today, O'Donnell, 58, legally selects medical marijuana pot brands from the "bud tender" at the Coffeeshop Blue Sky in downtown Oakland. And he feels proud the dispensary soon will pay taxes on his purchases — thanks to Oakland's passage of the nation's first cannabis taxation law on July 21.

"I've gone all the way from doing 60 days in jail to paying taxes on this," O'Donnell said. "I'm glad to help out — legitimately."

When 80 percent of Oakland voters approved a gross receipts tax that charged the city's four pot dispensaries $18 for every $1,000 in revenue, they added political smoke to efforts in other California cities to treat municipal budget deficits by taxing medical marijuana revenues.

The Oakland vote also stoked a calculated self-taxation movement by cannabis advocates. Oakland medical pot dispensaries that all but begged to pay new taxes are backing a 2010 ballot initiative drive to legalize marijuana for personal use and soothe the Golden State's fiscal woes with more than $1 billion in state cannabis taxes.

"This is just one tax of many. It's one battle in a big war," said Richard Lee, owner of Coffeeshop Blue Sky. "It's a reverse tax revolt: No taxation without legalization."

Lee, founder of, also is president of downtown Oakland's Oaksterdam University, an unusual trade school that teaches marijuana cultivation, retail management and advocacy.

He says the school expects to donate $500,000 for signature gathering for the proposed California Cannabis Initiative.


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