Question

In 2009, the voters of Oakland, California, passed a measure to tax medical cannabis (marijuana), effectively legalizing it. In 2010, the City Council adopted regulatiuons permitting industrial-scale marijuana farms with no size limits but requiring each to pay a $211,000 per year fee. One proposal calls for a $100,000 square feet farm, the size of two football fields. Prior to this legalization, only individuals could grow marijuana. These small farmers complained bitterly, arguing that the large firms would drive them out out of the industry they helped to build due to economies of scale. Draw a figure to illustrate the situation. Under what conditions (such as relative costs, position of the demand curve, number of low-cost firms) will the smaller, higher-cost growers be driven out of business?

Answer 1

Oakland's bid to come to be the primary U.S. Metropolis to tax proceeds on clinical marijuana handed Tuesday by a landslide vote.

About 80 percent of folks balloting within the Oakland election authorized the new medical marijuana tax.

About eighty percent of voters chose to impose the tax on Oakland's scientific marijuana facilities, in keeping with the Alameda County Registrar of Voters.

Some celebrated the news at Oaksterdam college by means of hand-rolling gigantic marijuana cigarettes or stuffing hashish into pipes. The university trains pupils for work in the medical marijuana enterprise.

"it's predominant seeing that the town of Oakland is facing a big deficit like many jurisdictions in California," said Steve DeAngelo, a leader of one of the most metropolis's cannabis golf equipment. "And we decided to step up to the plate and make a contribution to the city in a time of need."

DeAngelo, probably the most persons who led the hassle to get the tax authorized, stated his industry will now ought to pay greater than $350,000 from the new tax next yr. Watch file from CNN's Dan Simon »

Oakland's city Council was once also at the back of the transfer.

"considering that the medical hashish dispensaries are anything that was once legalized in California, why not have revenue from it?" stated councilwoman Rebecca Kaplan.

There was no formal opposition to the trouble, but some drug combatants say the tax sends the wrong message.
Melissa Etheridge: medical pot should be authorized
"The taxation of a federally unlawful drug isn't anything that the neighborhood should receive," said Paul Chabot of the Coalition for a Drug Free California. "With the state in dire straits in finances and the nation watching for ways to pay down debt, watching at illegal medications is the absolute incorrect factor to do."

The measure, passed in precise mail-in election Tuesday, imposes a 1.Eight percentage gross receipts tax on the four licensed clinical cannabis dispensaries in Oakland.

These facilities would ought to pay about $18 in taxes for each 1,000 in marijuana income.