Mayor Jesse Arreguín has introduced an ordinance to reduce the local business license fee on recreational cannabis. The current “tax” established by voters with Measure S in 2010 is set at 10%. Arreguín’s proposal reduces the tax to 5%, although at the last City Council meeting, some members voiced interest in further reductions or outright elimination of the local tax. This proposal is on the City Council agenda again on Tuesday.
We support the decriminalization of marijuana, but we strongly oppose lowering local cannabis taxes. Although many people will be responsible in their marijuana use, it is a product that is both intoxicating and addictive and, like alcohol and tobacco, poses and produces social and health costs. The tax on marijuana is an important public health strategy to address these costs.
Social and Health Costs
Marijuana smoking poses similar risks as tobacco, including exposure to second-hand smoke, low birth weight in babies, and smoking-related diseases. Starting young and using marijuana frequently are major risk factors for harm, which can include addiction and problem use, motor vehicle crashes, psychosis and schizophrenia, according to the major 2017 review by the National Academies of Science.
We are seeing the associated of costs of impaired driving, including the local incident in 2016 in which a driver ran over and dragged a cyclist for 60 feet before realizing what he had done.
Research shows that that early use and regular use of cannabis is particularly damaging for developing brains. Although marijuana remains illegal for young people, we know that legalization will only make it easier for those under 21 to access it. Daily use by teenagers has also been associated with a halving of the high school graduation rate in studies from Australia and New Zealand. We want to see graduation rates going up, not down
The marijuana industry is already using marketing strategies designed to attract young people. We all know it is illegal to sell tobacco and alcohol to people under age 21, yet there are flavored products that seem harmless and are priced very cheaply and aimed at kids, such as alcopops, little cigars packs sold for under a dollar, and vaping liquids, that come in flavors like bubble gum and cotton. The dirty truth is the all these corporations know that youth are a vital source of lifetime customers, especially if early use leads to addiction.
Why keeping the tax is vital
The higher tax rate will have the most impact on youth who are price sensitive. Additionally, the higher tax will create revenue that will allow Berkeley to address the public health impacts of marijuana use. Think of the sugary drink tax model that Berkeley so proudly initiated and before that the tobacco tax model pioneered by the State of California in 1988. In sum, these taxes accomplish public health goals by 1) raising prices, which can reduce access to young people who are price sensitive; 2) raising revenues for prevention and treatment.
Why the rush to reduce the tax?
The argument justifying the ordinance is that neighboring cities are lowering their marijuana taxes. That argument seems unfounded. According to the ordinance, Oakland’s tax remains at 10%, Hayward at 15%, San Leandro is phasing up to 10% and Emeryville will soon have a tax. We encourage the city of Berkeley to take the lead in a regional effort to maintain local marijuana business taxes and direct them towards preventing the social costs of marijuana use.
We ask that the City Council hold a special session to hear from public health experts, including the Berkeley health officer, and the city’s finance department. It is the city’s responsibility to reduce the social costs of marijuana, not protect the profits of the dispensaries. Berkeley has an opportunity to be a leader in crafting an intelligent public health response to the social costs of legalizing marijuana. Let’s take the time to do just that.