Phoenix Mayor proposes massive taxes on medical-marijuana dispensaries; Rose Law Group land-use & regulatory attorney Thomas F. Galvin calls the tax ‘arbitrary and capricious’

By Joseph Flaherty | Phoenix New Times

The mayor of Phoenix is prepared to levy a significant new tax on medical marijuana businesses that could decimate the city’s dispensaries and raise costs for patients.

In a letter to the Phoenix city manager on Thursday, Mayor Thelda Williams proposed an occupational licensing tax on medical-marijuana businesses in order to fund Phoenix’s police and fire departments.

The letter, obtained by Phoenix New Times, directs City Manager Ed Zuercher to place a possible tax and licensing program for marijuana-related operators in Phoenix on the October 2 City Council agenda.

The city’s looking at options with big numbers, like maybe an occupational license tax based on 17 percent of the previous year’s gross receipts, or a flat-rate registration tax of $560,000 on medical marijuana retail businesses and $920,000 on cultivation sites.


“The city might be facing a budget crunch but trying to plug in the gaps in this manner is not the most effective way to resolve a budget crisis. Everyone in Phoenix should be concerned that the city council is seriously considering targeting a thriving industry with an arbitrary and capricious tax without any input from stakeholders. There are thousands of Phoenix residents who suffer from chronic illness who benefit today from the law passed by Arizona voters nearly a decade ago. And all businesses in Phoenix will wonder – ‘are we next?’ This punitive tax, if passed, won’t gather more tax revenue for the city because it will snuff out or drive out the industry. And all businesses from out of state will think twice about moving to Phoenix because they will wonder if they’ll get hit with a tax ambush if the city’s budget is as bad as its been made out to be.”

~Thomas Galvin