The cities up to some dirty tricks again. On the heals of SJCBC LLC (the San Jose Cannabis Buyers Collective) and PHCC (Pharmers Health Center Cooperative) vs. the City of San Jose case, the city of SJ has sent out a new round of letters:

(click the image for a larger version)

The problems with this letter, when applied to the SJCBC are:

1. SJCBC is not within 500 feet of any sensitive uses. All the houses around SJCBC are light industrial, and include a paint factory, body shop, and maid service.

2. Pierluigi Oliverio added verbal comments to his memo telling staff that they should allow collectives to be on industrial land.

Based on the results of the case tomorrow, SJCBC will decide on its approach to this letter.

Local Collectives Feel Case is Stronger Due to Judge’s Ruling in Southern California

San Jose, Calif., Aug. 20, 2010 – The case of the SJCBC LLC (the San Jose Cannabis Buyers Collective) and PHCC (Pharmers Health Center Cooperative) vs. the city of San Jose has been extended to Thursday, August 26 to allow attorneys to present the relevance to Wednesday’s recently decided Anaheim case.

“We feel municipalities like San Jose are downplaying the importance of the Anaheim ruling as the decision cut the legs out of the city’s argument,” said Dave Hodges, founder of the SJCBC.

Although the Anaheim decision did not rule on the preemption argument, the ruling did reject the following as valid arguments against cannabis collectives:

1. Sales are not legal.
2. Zoning issues from Ross v. Raging Wire.
3. The Claremont Case is authority for a total ban.
4. Federal vs. State law.

The Anaheim ruling directly affects the SJCBC and PHCC case as it eliminates the city of San Jose’s rational for sending threatening letters to landlords and claiming collectives are illegal in San Jose. The SJCBC and PHCC vs. the city of San Jose will be the first case that uses the Anaheim ruling in court.

“We’re looking forward to getting back into court Thursday so we can once and for all get a decision as this case directly impacts protecting the civil rights of all cannabis patients in San Jose,” said Andy Schwaderer, founder of PHCC.

A Press Conference will be held at 1pm on Thursday, August 26 in front of the SJCBC at 1082 Stockton Ave in San Jose.

In a 7 to 4 vote, the San Jose City Council approved moving item 3.3.c to the November ballot!

They made one modification I recommended, adding the words “up to” before 10%.

One fun part of this initiative requires anyone who is involved in “more than five (5) working days per year”, “whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities” to have a San Jose Business Tax Certificate, and be subject to this tax.

If this passes in anyone who provides any cannabis related products to any collectives in San Jose will be required to have a business license in San Jose. I am personally in favor of this, but it will create a huge impact upon current patient provider models, and would potentially double the tax, requiring patient providers to pay the up to 10% tax in addition to the collectives.

Even “transporting” any cannabis or “any ancillary products in the City, whether or not carried on for gain or profit” will be taxed, and fall under the guidelines of this initiate. This could refer to caregivers who pick up medication for ill patients.

4.66.210 Business Tax Certificate – Required

A. There are imposed upon all persons engaged in marijuana business in the City taxes in the amounts prescribed in this Chapter and Chapter 4.76. It shall be unlawful for any person, either for him or herself or for any other person, to commence, transact or carry on any marijuana business in the City without first having procured a business tax certificate from the City under Chapter 4.76 and having paid the tax set forth therein, and without complying with any and all provisions contained in this Chapter. The carrying on of any marijuana business without complying with any and all provisions of this Chapter and Chapter 4.76, shall constitute a separate violation of this Chapter and Chapter 4.76 for each and every day that such marijuana business is so carried on.

B. The business tax certificate required to be obtained under Chapter 4.76 and the taxes required to be paid under this Chapter and Chapter 4.76 are declared to be required pursuant to the taxing power of the City of San José solely for the purpose of obtaining revenue and are not regulatory permit fees.

4.66.070 Engaged in Business

A. “Engaged in business” means the commencing, conducting, operating, managing or carrying on of a marijuana business and the exercise of corporate or franchise powers, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities.

B. A person shall be deemed engaged in business within the City if:

1. Such person or person’s employee maintains a fixed place of business within the City for the benefit or partial benefit of such person;
2. Such person or person’s employee owns or leases real property within the City for business purposes;
3. Such person or person’s employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business;
4. Such person or person’s employee regularly conducts solicitation of business within the City;
5. Such person or person’s employee performs work or renders services in the City on a regular and continuous basis involving more than five (5) working days per year;
6. Such person or person’s employee utilizes the streets within the City in connection with the operation of motor vehicles for business purposes. The foregoing specified activities shall not be a limitation on the meaning of engaged in business.

4.66.110 Marijuana Business

The term “marijuana business” means business activity including but not limited to, planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, wholesale, and/or retail sales of marijuana and any ancillary products in the City, whether or not carried on for gain or profit.

Memorandum

TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: Deanna J. Santana
SUBJECT: MARIJUANA BUSINESS TAX BALLOT MEASURE

SUPPLEMENTAL

The purpose of this supplemental memorandum to is to restate and further clarify staff’s discussion in the original staff report, dated July 23, regarding the City Council’s ability to adjust the marijuana business tax rate in the event that a marijuana business tax measure is approved by voters, as well as transmit a summary report on themes and trends regarding the taxation of marijuana businesses collected at the July 20, 2010 Medical Marijuana Community Meeting. It should be noted that staff has prioritized the issue of taxing marijuana businesses for developing the June 20 community input summary, given that this issue will be considered on August 3 by the City Council. As such, staff plans to transmit an additional summary report on the trends and themes on the other topics of interest that were discussed at the July 20 Community Meeting before the City Counci! Study Session planned for this fall.

Marijuana Business Tax Measure

Staff’s recommendation provides the City Council with the flexibility to impose a tax at the maximum rate of 10% of gross receipts on all marijuana businesses if approved by a majority of the voters on November 2. State law requires that any increase, extension or expansion of a tax requires voter approval. However, the reduction of a tax does not require voter approval. Therefore, if a majority of the voters on November 2 approve the marijuana business tax at the rate of 10% of gross receipts, the City Council can subsequently reduce the tax rate at any time. The Council could also subsequently create a tiered rate by reducing the tax rate for medical marijuana businesses specifically.

Staff’s recommendation is strategically developed to allow the City Council maximum flexibility absent an adopted regulation program and/or knowledge of the voter outcome Of Proposition 19. This approach grants the City Council options when more complete information is available for its public policy development following the November election.

July 20 Medical Marijuana Community Meeting

On Tuesday, July 20, 2010, staff held a public community meeting at Roosevelt Community Center to present key features of the medical marijuana ordinances and a Marijuana Business Tax ballot measure.

Over 100 people attended the two-hour meeting. Unlike the June 7, 2010 community meeting at City Hall, where public discussion and input collection was conducted in a large group setting with speakers providing individual comments; the July 20 meeting was structured differently to
allow participants to self-select a topic of interest, and provide input in a small workshop setting. Below is the list of key topics that were selected as the key discussion points based on demonstrated public interest. It should be noted that members of the public were not limited to these topics only; and, they had the opportunity to express views/opinions on other topics of
interest.

1. Registration Process & Requirements: 10 Collectives, Priority Order, 1 Year Registration Term, Registration Fee, etc.
2. Operating Requirements: Safety & Security, Day & Hours of Operation, Owner/Management Requirements, Packaging, Maintenance of Records, etc.
3. Taxing Marijuana Businesses: Ballot Measure, Tax Rate Policy Options, etc.
4. Land Use Policy: Sensitive Uses & Distance Requirements, Cultivation, Public Noticing, etc.

At the end of the small group discussions, each group had the opportunity to report out to all participants the key themes and questions that emerged from their discussion. Below are some summary comments about the key themes regarding taxing marijuana businesses:

• Medical marijuana should not be taxed, given that it was expressed that the taxation of medicine is morally wrong. Prescription drugs and botanical herbs were given as an example of types of medicines that are not subject to tax.
• The City’s proposed tax rate should be based on strong logical and rationale, and be set at not more than 2%; 0% and 0.5% rates were also suggested.
• There should be a two-tiered tax structure in which tax rates for medical and non-medical marijuana would be set at different rates.
• City Marijuana Business Tax coupled with the already existing State sales tax and potential City Registration Fees would cause the prices of medical marijuana to rise for patients, therefore driving patients to purchase their medicine in the illegal marijuana market.

/s/
DEANNA J. SANTANA
Deputy City Manager

Email from Dave Hodges to the San Jose City Council:

Hello Mr Mayor and Honorable Council Members,

I have a few major concerns with the Marijuana Tax Initiative you will be discussing at the August 3rd Council meeting. Attached to this email is a memo suggesting the minimum changes needed in order for the Marijuana Tax Initiative to gain the support of the medical cannabis community. This topic should have been discussed more in-depth at any of the community out reach meetings, but it was not. As is, I feel it does not reflect any input from the San Jose medical cannabis community, and will only serve to make a bigger mess of this whole situation.

Among other problems with the San Jose Marijuana Tax Initiative, I feel the proposed rate is extremely high(no pun intended). 10%, in addition to the 9.25% tax we already pay, would be taxing medication at 19.25%, this would place an undue burden upon medical patients. Many of which who are either low income or live on a fixed income, due to age or medical reasons.

Some of my major concerns with the Tax Initiative as has been presented are:

No separation between Medical Cannabis and “Adult Use” Cannabis. Medication should not be taxable, but if we must pay a tax, it should be less for medical users then the “Adult Use” users from Prop19.

Section 4.66.510 Rules and Regulations- Allows “the Director” (of the Finance Department or other director designated by the City Manager) to “promulgate”/change the “rules and regulations”, “from time to time” WITHOUT vote of the council.

Section 4.66.550 Deficiency Determinations- Is completely unnecessary and potentially grants the Director more powers then the IRS.

Section 4.66.600 Violation Deemed Misdemeanor – Penalty- Creates a new class of criminals out of existing operators, growers, vendors, and potentially even patient caregivers. Which is punishable by a fine of $500 or “six (6) months, or by BOTH such fine and imprisonment.”

Section 4.66.530 Audit and Examination of Records and Equipment- Allows “the Director” and the Chief of Police to violate HIPPA by investigating “all equipment, of any person engaged in marijuana business in the City”

Thank you for your time and dedication to the City of San Jose.

Best Regards,
Dave Hodges
Founder
SJCBC LLC
SanJoseCannabis.com

P.S: If you have 3 minutes of time, please watch the YouTube video titled “The Flower”; without any words it can explain exactly where we are with this issue in our society.

Attachments:

MEMO:
Cannabis Tax Suggestions to City Council 7-30-10.pdf

PAGES FROM THE TAX:
Suggested-Modified-Pages-of-the-SJ-Marijuana-Tax.pdf

A must watch video 3min that explains it all

Spread the flower, save the world!

Today at the San Jose Rules Committee, the committee moved forward with the Marijuana Business Tax. It will now OFFICIALLY be on the Aug 3rd City Council Agenda.

At today’s meeting Dave Hodges of SJCBC LLC (the San Jose Cannabis Buyers’ Collective) presented a memorandum for public record highlighting the problems with the current suggested legislation

Memo From Dave Hodges: Cannabis Tax Suggestions for SJ Council
- Cannabis Tax Suggestions for SJ Council – Just Changes

Some of the most concerning verbiage:

4.66.510 Rules and Regulations

For purposes of apportionment as may be required by law and for purposes of administration and enforcement of this Chapter generally, the Director, with the concurrence of the City Attorney, may from time to time promulgate administrative rules and regulations.

4.66.550 Deficiency Determinations

If the Director is not satisfied that any statement filed as required under the provisions of this Chapter is correct, or that the amount of tax is correctly computed, he or she may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the statement or upon the basis of any information in his or her possession or that may come into his or her possession. One or more deficiency determinations of the amount of tax due for a period or periods may be made. When a person discontinues engaging in a business, a deficiency determination may be made at any time within three (3) years thereafter as to any liability arising from engaging in such business whether or not a deficiency determination is issued prior to the date the tax would otherwise be due. Whenever a deficiency determination is made, a notice shall be given to the person concerned in the same manner as notices of assessment are given under Sections 4.66.560 through 4.66.580.

4.66.600 Violation Deemed Misdemeanor – Penalty

Any person violating any of the provisions of this Chapter or any regulation or rule passed in accordance herewith, or knowingly or intentionally misrepresenting to any officer or employee of the City any material fact in procuring the business tax certificate provided for in Chapter 4.76 shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than five hundred dollars ($500) or by imprisonment for a period of not more than six (6) months, or by both such fine and imprisonment.

DAVE’S RECOMMENDATIONS:

With regards to proposed Cannabis gross receipts tax.

We recommend the proposed tax rate on Medical Cannabis Retail businesses (dispensaries) be set at a maximum rate of 3%, and that a tax rate on Adult Use Cannabis businesses to be set separately at up to 5%. In addition, we recommend the following modifications to the current proposal:

1. MODIFY Section 4.66.250 “Amount of Businesses Tax Owed”
   • ADD the verbiage “up to”
   • CHANGE the verbiage “ten percent 10%” to “three percent (3%) of gross receipts”
2. MODIFY Section 4.66.300 “Payment – Penalty for Delinquency” ITEM “C”
   • ADD the verbiage “, or from the first operative date of this Chapter”
3. REMOVE COMPLETELY Section 4.66.510 Rules and Regulations
4. MODIFY Section 4.66.530 “Audit and Examination of Records and Equipment”
   • Remove the verbiage “and, where necessary, all equipment, of any person engaged in marijuana business in the City, for the purpose of ascertaining the amount of business tax, if any, required to be paid by the provisions hereof, and for the purpose of verifying any statements or any item thereof when filed by any person pursuant to the provisions of this Chapter.:”
5. REMOVE COMPLETELY Section 4.66.550 “Deficiency Determinations”
6. REMOVE COMPLETELY Section 4.66.600 “Violation Deemed Misdemeanor – Penalty”
7. MODIFY Section 4.66.630 “Effect of State and Federal Reference/Authorization”
   • REMOVE the verbiage “and federal” & “or federal”

Read the full legislation:

• Original City of SJ: San Jose Marijuana Tax for November Ballet

• with Dave’s Changes: San Jose Marijuana Tax for November Ballet

Q: What’s next for San Jose Medical Cannabis?

A: The City of San Jose is trying to put in place a 10% SALES TAX in addition to the states 9.25% sales tax.. Taxing medication in SJ at 19.25%!

With a survey of less then 800 “likely voters,” of which over 50% were over 45-White/Caucasians, and 80% lived in single family homes, the city of San Jose has come to the conclusion that a 10% sales tax for medical cannabis is appropriate. The survey they used is both confusing and misleading. This is another attempt by the powers at be to chase medical cannabis out of San Jose. A 19.25% tax would drive medical patients back to the streets, where no tax is charged, or out of town for their medication

Their current goal is to place the 10% tax on the November Ballot, at the next city council meeting August 3rd, 2010

Review the survey & potential ballot measure yourself: [Read more →]

MEDICAL MARIJUANA ORDINANCES COMMUNITY MEETING

July 20, 2010, 6:00 p.m. – 8:00 p.m.
Roosevelt Community Center

FINAL AGENDA

1. Opening Remarks (6:00 p.m.)

2. Review March 30 Council Referral and June 22 Council Direction (6:05 p.m.)

3. Small Group Discussion (6:20 p.m.)

   During the small group discussion, attendees will have the opportunity to self-select a topic (see list below) to provide input that will help staff further develop the Ordinances for City Council consideration. Attendees will also have the opportunity to share any additional thoughts for City consideration.

   • Registration Process & Requirements: 10 Collectives, Priority Order, 1 Year Registration Term, Registration Fee, etc.
   • Operating Requirements: Safety & Security, Day & Hours of Operation, Owner/Management Requirements, Packaging, Maintenance of Records, etc.
   • Taxing Marijuana Businesses: Ballot Measure, Tax Rate Policy Options, etc.
   • Land Use Policy: Sensitive Uses & Distance Requirements, Cultivation, Public Noticing, etc.

4. Large Group Discussion (7:10 p.m.)

   Each group will share themes that emerged from their small group discussion.

5. Next Steps / Adjournment (7:50 p.m.)

   August 3, 2010 City Council Meeting
   November 18 or December 13, 2010 City Council Study Session on Medical Marijuana (Tentative)

This meeting will be facilitated by Dr. Shawn Spano. Dr. Spano specializes in designing and facilitating public engagement forums and meetings.

Discounts and freebies at SJCBC all day Friday July 16th & Saturday 17th

Member party July 17th! Hang out and medicate on site all day 11am-7pm!

BBQ from 12:30-3:30pm

Raffle at 4pm for gifts including: pipes, vaporizers, medication, and more!

All week, get 1 raffle ticket for ever $20 you spend at SJCBC!