Phoenix’s City Council on Tuesday unanimously killed a proposed medical marijuana tax that would have cost some MMJ businesses more than $1 million a year.
The proposed tax became public only last week.
Mayor Thelda Williams, who acknowledged her staff had worked on the proposed tax scheme behind the scenes “for a very long time,” was criticized by some council members for her lack of transparency.
A large crowd from the MMJ industry jeered the planned tax. After some heated discussion, the mayor abandoned plans to push it through.
Joe DeMenna, executive director of the Arizona Dispensaries Association, called the proposal “ambush-style politics” that would have a disastrous effect on Arizona’s MMJ industry and might also be in violation of the state’s medical marijuana law.
J.P. Holyoak, co-founder of Arizona Natural Selections, told the council the proposed tax would cost his cultivation/processing business $2.9 million annually.
“I cannot afford it. I will close my doors,” Holyoak told the meeting, which was streamed live online.
City councilor Sal DiCiccio called the proposal a “backroom deal” that the council was kept in the dark about until late last week, when it was placed on Tuesday’s agenda for “possible action.”
“It’s just another step of gaming the public,” DiCiccio said, adding that such proposals should be discussed in an open setting.
Williams tried to defend her decision, saying the city, squeezed by a massive pension debt, needs to raise revenues to support additional public-safety services. The city projected it could raise $40 million-$50 million a year from the plan.
While the council killed the proposal, some industry officials, including DeMenna, agreed to sit down with the city to discuss the issue.