In an opinion that could generate more revenue for cash-strapped governments and give additional legitimacy to a fledgling industry, Colorado Attorney General John Suthers said Monday that the state can collect sales tax on medical marijuana.

“Medical marijuana is tangible property that is generally subject to state sales tax,” Suthers, a Republican, wrote in response to a query from Gov. Bill Ritter, a Democrat.

The opinion also said medical-marijuana dispensaries must obtain retail-sales licenses from the state to do business.

Ritter’s administration said it would immediately direct medical-marijuana dispensaries to start paying sales tax and obtain retail licenses.

“Colorado voters have said they want medical marijuana in Colorado,” said Ritter spokesman Evan Dreyer. “But what we have now is chaos.”

Voters in 2000 approved a constitutional amendment that legalized medical marijuana. The issue has gained steam this year as local and state officials grapple with rapid growth in the number of dispensaries and registered users.

“There’s been so much uncertainty about this since the summer, we asked for the opinion because we need guidance from the attorney general,” Dreyer said. “We also need clarity from the legislature, and we’re working with lawmakers on that for the upcoming 2010 session.”

Medical-marijuana advocates applauded the opinion as a step in the right direction, saying the industry had been working on proposals to enact some sort of tax.

“I think the community is willing to pay taxes if it will help prove the legitimacy of their efforts,” said Courtney Tanning, executive director of the Colorado Wellness Association, which represents medical-marijuana dispensaries and the patients and doctors who deal with them.

The medical-marijuana industry “has been an underground, black-market community for so long that I think they’re really willing to . . . pay dues to be taken seriously,” Tanning said.

And at least one lawmaker sees the tax ruling as a boon for state coffers.

“I’m pleased we now can get some tax revenue from the sale of a constitutionally authorized medical product,” said state Sen. Chris Romer, D-Denver, who has been pushing legislation to further regulate medical marijuana.

Denver to collect sales tax

The opinion comes as the city of Denver was moving to impose its own sales tax on medical marijuana.

City Attorney David Fine said Denver will notify dispensaries that it plans to collect municipal sales tax on medical marijuana starting in December.

Suthers’ opinion said medical marijuana does not qualify for the sales-tax exemption granted to prescription drugs because it is not prescribed. (Physicians merely authorize in writing that a patient with a debilitating medical condition might benefit from its use.)

However, seeds used to grow medical marijuana would qualify for the exemption on agricultural products, the opinion said.

In an interview with The Denver Post, Suthers emphasized that the opinion did not speak to the legality of selling medical marijuana itself, only whether the sale of it is taxable. He said the sale of illegal drugs is taxable, so the sale of medical marijuana could be taxed, regardless of its legal status.

There is an argument that voters did not authorize medical-marijuana dispensaries when they approved Amendment 20, Suthers said, adding that federal law prohibits them. The Obama administration has said it would not intervene in states with medical-marijuana laws.

Suthers said his office had no plans to issue an opinion on dispensaries.

“I think it’s most likely that it’s the legislature that is going to clarify the standing of dispensaries,” he said.

Tim Hoover: 303-954-1626 or thoover@denverpost.com