When Taxpayers Welcome Taxes

Photo: Neeta Lind

It’s not often that you see a quote like this.
Referring to a new tax that will fall squarely on the shoulders of his business and just a few others, Steve DeAngelo said in a CNN article,

And we decided to step up to the plate and make a contribution to the city in a time of need.

Remarkably, DeAngelo is not just willing to pay this new tax, he actually led the effort to get the tax approved. His business will now have to pay $350,000 in additional taxes next year because of the new tax.
Why is DeAngelo so eager to pay these taxes? I’m almost certain it is not because he is an altruist.
The real answer, I suspect, is that he is generating $19 million a year in revenues selling in a market (medical marijuana) that is barely legal. And DeAngelo probably suspects that taxation will increase the likelihood that his business remains legal, for two reasons.
The first reason is that taxing a good implicitly says that the government acknowledges the legitimacy of the activity; we tax legitimate goods, and we fine and imprison those who sell illegitimate goods. Second, while experts suggest that marijuana itself is not very addictive, new sources of tax revenue surely are addictive! So once the revenues start coming, government won’t want to turn off the spigot.
I’m curious to hear from blog readers who have information on how much these medical marijuana clubs charge. I wouldn’t think it would be very expensive; marijuana on the street is as cheap as can be.
Can someone explain to me how one club generates $19 million in revenues a year? There must be a lot of sick people out there.