The Phoenix City Council voted unanimously to kill a tax proposal that could have cost medical marijuana dispensaries millions of dollars each year.
After backlash from the medical marijuana industry and transparency concerns voiced by council members, Mayor Thelda Williams was forced to back down on the idea.
The tax plan would have raised $40 million to $50 million per year for the city’s police and fire departments by taxing medical marijuana dispensaries and cultivation sites by the size of the facilities.
Some marijuana businesses would have been on the hook for more than $1 million under the tax model.
The tax idea came from the Professional Fire Fighters of Arizona, the statewide union, which paid a law firm to craft the proposal.
Bryan Jeffries, the mayor’s chief of staff and president of the firefighters union, said the union had been studying a medical-marijuana tax for about a year because it is concerned about the status of public safety in Phoenix. He presented the idea to Williams when she took over as interim mayor at the end of May.
The proposal caught dispensary owners, medical-marijuana patients and some council members by surprise when it appeared on Tuesday’s council agenda, which posted online Thursday evening.
Typically, a policy proposal of this magnitude would go to a council subcommittee first, or come before the full council to get approval to research the idea.
But Tuesday’s council meeting was the first time the topic was posted for discussion at a public meeting. The vote was to begin a 60-day notice process on the tax.
The industry called the tactic “an ambush.”
Dispensary owners and medical-marijuana patients mobilized and called on the council to kill the proposal. They packed the council chambers, wearing stickers that read “no new taxes” and “no tax on medicine.”
Councilwoman Debra Stark initially suggested a 30-day continuance so the council could meet with industry representatives before it made any decisions. The suggestion drew a chorus of boos from the testy audience.
Joe DeMenna, executive director of the Arizona Dispensary Association, told the council that the industry was willing to meet with the council, but not with the threat of a 30-day time frame.
Councilman Sal DiCiccio instead suggested the council kill the proposal and start from scratch with transparent conversations with dispensary owners and medical marijuana patients. He criticized city staff and the mayor for the secretiveness surrounding the proposal.
J.P. Holyoak, co-founder of Arizona Natural Selections, told the council that his business would have to pay $2.9 million if the tax proposal passed.
“I cannot afford it. I will close my doors,” Holyoak said. “This is a job killer. But, beyond being just a job killer, we provide medicine to thousands and thousands of people including my daughter Reese.”
Reese suffers from a rare genetic condition. Holyoak pushed his daughter in a stroller up to the council members.
“See the face of who you’re going after,” he said.
After Holyoak’s speech and testimony from another parent, the council voted unanimously to kill the proposal.