AP Photo/Mathew Sumner,File

Oakland Considers Reducing Marijuana Tax By Half

Holly Quan
May 21, 2019 - 3:07 pm

OAKLAND — Oakland was the first city in the nation to tax marijuana in 2009, but pot business owners say now that the 10% rate is too high. 

In response to the complaints that taxes are stifling sales of recreational weed, the city council on Tuesday will consider cutting the rate in half. 

Such a cut would cost the city $9 million in revenue and lead to eventual cuts in city services, officials from the Finance Department have said. 

Berkeley has a 5% pot tax while Emergville's level is 3%. 

The steeper tax rate is one reason why Kevin Ahaesy said he's had half the number of customers he expected in his shop, Eco Cannabis on Telegraph Avenue, since opening in January. 

"I don't think the taxes would be as big of a deal if we didn't have a black market to compete with," said Ahaesy.

Related: UCSF Study Connects Legal Weed With Increased Injuries And Accidents

His business operates under the city's equity program to encourage wider opportunities in the pot industry for disadvantaged groups. All of his employees are Oakland residents and half of them have drug convictions.

Oakland-born Jessie Grundy said that customers at his dispensary Green Peaks have said they'll buy street weed because it's far cheaper than retail. 

"Even people who want to support me sometimes are like 'Oh, I love you brother, but I don't got the means to support you right now," he said. "They can get it cheaper from somewhere else."