Calif. Pot Dispensaries Run Afoul of Taxman

BERKELEY, Calif. (AP) — In Northern California, few cities have worked as long or as hard as Berkeley and Oakland to nudge medical marijuana into the mainstream.

But life in the mainstream brings its own set of mainstream problems.

Even as fears of criminal crackdowns fade, the flagship pot dispensaries in each city are facing tax troubles that could cost them millions of dollars.

In both cases, the dispensaries' difficulties stem from the legal haze that still surrounds the drug in California despite being legalized for medical use here nearly 15 years ago. The cases also highlight the huge sums of money moving through the state's medical marijuana operations, which must operate as nonprofits under state law.