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1 August 2012


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Small Businesses In The Medical Marijuana Industry Are Under Pressure

The medical marijuana industry is under pressure from the federal government and local communities.

Medical Marijuana companies in cities such as Santa Monica and California are being forced to close shop.

The LA City Council is moving to ban medical marijuana dispensaries citywide.

According to the Board of Equalization, with over 400,000 users and and 638 small businesses with revenues in excess of $1.3 billion, California has the largest market for medical marijuana in the country.  It generates $105,000,000 in sales taxes.
Nation-wide sixteen states and the District of Columbia have legalized the use of marijuana according to the National Organization for Reform of Marijuana Laws.  These states include:

District of Columbia
New Jersey
New Mexico
Rhode Island
This is a multi billion dollar industry.  There are over 1,800 small businesses in the industry.  State sales taxes range from 0% to 7%.  Over $151,000,000 is generated in taxes to the states from this industry annually.  There are over 730,000 users nationwide.
Entry to the industry can be high depending on the state.  Some states charge a licensing fee for businesses (caregivers) to operate as well as a participation fee to individuals who want to join the state medical marijuana program.  Licensing fee can be can be as high as $5,000 annually.  The fee to join a medical marijuana program can be as high as $200 per year.

Some states limit the number of patients a provider can have at 1,000.
Cities are taking a hard look at medical marijuana laws because these businesses have become a magnet for crime, nuisance, and addiction. The intent of the medical marijuana laws was to help sick people who can benefit from it's use.  However, the typical customer has become individuals without a medical condition that requires the use of medical marijuana.

- National Organization For The Reform of Marijuana Laws (NORMAL)
- New York Times
- Vermont Medical Marijuana Fee & Tax Reort

By Jack River









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