Marijuana oversight bill could add $40 million in state tax revenue via closing of loophole

PHOENIX (FOX 10) -- An effort to regulate the medical marijuana industry in Arizona is stalling a bit, but one state lawmaker is determined to push things forward.

"I despise the masquerade," State Sen. Sonny Borrelli.

State Sen. Borrelli, a GOP lawmaker, has been pushing to make the state's marijuana industry more transparent, but his bill that could pave the way for more tax revenue suddenly hit a roadblock a week ago.

"Nothing more than making sure that two state agencies are communicating properly, the way government should be working, and also to collect sales tax," said State Sen. Borrelli.

State Sen. Borrelli said that number could be in the millions.

"I believe there is some inaccuracies in there, since it's all-cash," said State Sen. Borrelli. "I'm estimating, on a conservative level, that we're losing $40 million a year."

Democratic lawmakers are speaking out about the bill.

"My understanding is that the [Department of Revenue] already has the tools it requires to audit, to actually subpoena, to actually get the records and making sure that the proper transaction privilege tax is collected," said State Rep. Randy Friese.

Aside from the potential windfall is the issue of oversight. With the push to legalize recreational marijuana coming into view, State Sen. Borelli said the Department of Health is tangled up in a messy process.

"The Department of Health can go into any kind of business, from a Burger King to an abortion clinic, unannounced, during normal business hours," said State Sen. Borrelli. "But they have to give reasonable notice to a dispensary, which means I'm coming at Thursday at 3:00, is that okay with you?"

In fact, not only do they have to give dispensaries a heads up, they have to do it in writing. Such a practice has an origin that goes back to patient protection.

"It's all about profits. Has nothing to do with patients," said State Sen. Borrelli.