Palm Springs approves marijuana dispensary tax

The Palm Springs city council voted Wednesday night to tax medical marijuana dispensaries. The city’s legal dispensaries will pay a lower rate than those operating illegally. The council also decided to allow a 4th legal dispensary. There are only three right now.

Last month voters overwhelmingly approved a pot tax as high as 15 percent on every dollar of revenue dispensaries generate.

After studying tax rates on dispensaries in other jurisdictions that reached as high as 25 percent, a Palm Springs council subcommittee proposed a 10 percent tax on the city’s three legal dispensaries and a 15 percent tax on illegal dispensaries.

“We thought that would be a fair portion of the numbers that would help derive reasonable income without working too much of a hardship on the individual collectives,” said city attorney Doug Holland.

The three legal dispensaries could generate up to $450,000 a year for the city of Palm Springs.

The city says the majority of the tax proceeds will go toward regulating dispensaries and putting illegal dispensaries out of business.