Marijuana medicine for California

Vendors of "medical marijuana" at legal herbal clinics in Oakland, California, are offering to pay increased taxes in a move that many believe could save the state from bankruptcy.

Medical marijuana is big business in California. In Oakland last year "pot clubs" rang up sales of more than US$20 million ($32 million). Currently those clubs pay a minimal tax of US$1.20 for every US$1000 of marijuana sold.

However, in a move rare among business owners, the medical marijuana clinics are offering to raise the tax they pay to US$18 for every US$1000 of weed sold.

The marijuana tax, which voters will be asked to endorse in a ballot this month, would raise US$400,000 of annual revenue in Oakland alone. If adopted statewide, it could be worth billions.

California's Governor, Arnold Schwarzenegger, declared a statewide fiscal emergency in California last week after legislators failed to agree on a budget to address its US$24 billion deficit.

Tax revenues are plungingas the state suffers particularly badly in the global recession, and government offices close three days every month to cut costs.

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