Cash Crop: Local Government Taxation of Marijuana Businesses

By Ashley E. Ratliff and Scott C. Smith*

MCLE SELF-STUDY ARTICLE

(Check end of this article for information on how to access 1.0 self-study credit.)

When a majority of voting Californians passed Proposition 64 on November 8, 2016 legalizing the recreational use of marijuana¹, local governments immediately faced the question of whether to prohibit, permit or regulate the operation of new marijuana businesses within their jurisdictions. A prudent, potentially lucrative follow-up question, though, is whether, and how, local governments can properly impose local taxes on those businesses.