CA dispensary promises court fight over $767K tax ruling

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A California district court has ruled that Medimarts dispensary in San Jose must pay the city $767,058 in taxes and late fees, but the owner says the municipality’s not getting a dime.

Medimarts president David Armstrong says his group is a collective where members are co-owners who don’t buy marijuana, but rather make an “equitable contribution” toward the marijuana that is grown, NBC Bay Area reported.

“My next step is do whatever it takes to maintain my caregiver status for the 10,000 plus, active medical marijuana patients that we serve,” Armstrong told the NBC news station. “We all have equal rights to the medicine we make. So when you come in and pick up your medicine, there’s no transfer of ownership. Hence there’s no sale.”

Based on that reasoning, Medimarts has not paid the Marijuana Business Tax to the city of San Jose since May of 2012, according to the July 21 court filing.

Armstrong and his lawyers plan to appeal.

The battle goes back to December 2014 when the city sued Medimarts for non-payment of the tax. Medimarts countered with an injunction to stop the city from closing the business.