San Diego is trying to boost tax revenue from the city’s dozen legal marijuana dispensaries by auditing them and tightening restrictions on sales to medical cannabis patients, which are tax-exempt.
The audits, which are expected to conclude this month, aim to ensure the dispensaries are complying with a 5% tax on all cannabis sales that city voters approved in 2016, officials said.
The tax, which will increase to 8% on July 1, is expected to generate more than $6 million in revenue for the city in the current budget year, officials said. It’s a gross receipts tax, so it covers all revenue generated by a marijuana business.
Another goal of the audits is revealing the names of distributors supplying marijuana and edible products to the dispensaries, helping the city ensure none of those businesses are skirting the cannabis tax.
The city treasurer also plans to begin forcing dispensaries to require medical cannabis customers to present a state-issued Medical Marijuana Identification Card in order to be exempt from the city’s cannabis tax.
Since the city tax took effect in January, medical cannabis customers have been able to avoid paying the city tax by simply showing dispensary employees a physician’s recommendation.
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