Arizona Attorney General Tom Horne and state tax collectors agree that medical marijuana should be taxed like any other retail product, and potential dispensary owners say they expected a levy.

But a bipartisan bill to tax pot at 300 percent is far more than the dispensary crowd had expected.

The bill's sponsor, Rep. Steve Farley, D-Tucson, said he believes pot should be taxed at roughly the same rate as cigarettes. Farley also acknowledged that the tax rate, if House Bill 2557 passes, could act as a deterrent or at least reduce the amount that people use.

"We all know that not all this will necessarily go to sick people," Farley said. "The cost, even with the tax, will be less than pharmaceutical drugs."

Andrew Myers, executive director of the Arizona Medical Marijuana Association, said such a tax would deal a fatal blow to the fledgling industry and put marijuana out of reach for people who truly need it.

"We're talking about seriously and terminally ill patients," Myers said. "A 300 percent tax would tax everybody out of the market."

Myers, whose group spearheaded the initiative drive, said he supports a standard sales tax levy. It's a recognition by the state, he said, that dispensaries are legitimate businesses that can help stoke the economy.

Horne said Wednesday that medical marijuana falls outside the state sales tax exemption for prescription drugs and should be taxed.

Medical marijuana, under the law approved by voters in November, would be sold to patients with "certification" from their doctors.

"It's not a prescription. It's a written certification," said Anthony Forschino, assistant director of the state Department of Revenue. "It would just be a retail sale. Like buying something off the shelf or over the counter."

The state sales tax is 6.6 percent, with a portion of the revenues going to cities and towns, and 0.6 percent dedicated to K-12 education under a previous ballot measure. Cities also can levy their own tax on dispensary sales.

Proposition 203 allows licensed physicians to recommend medical marijuana to patients with debilitating medical conditions, including cancer, glaucoma, HIV/AIDS and Alzheimer's disease.

Patients would register for identification cards with the state Department of Health Services and could receive up to 2� ounces of marijuana every two weeks.

State health officials expect to grant dispensary licenses by late spring or early summer, following a series of public hearings. Marijuana dispensary owners would have to apply for a sales tax license.

Horne, who opposed Prop 203, said he believes a medical marijuana sales tax could bring in $40 million a year. He said his estimate was based on Colorado's experience.

Colorado has an estimated 100,000 medical marijuana users. It imposes a statewide sales tax, which brought in $2.2 million last year, according to news reports. Denver and Colorado Springs also have collected several hundred thousand dollars in city taxes.

Arizona health director Will Humble has said he anticipates fewer than 20,000 people will get permission to use medical marijuana under the draft rules established by his office.