North Bay Commercial Cannabis Taxes That Passed the Ballot

Golden State Government Relations
11.26.18 10:20 AM Comment(s)

North Bay Commercial Cannabis Taxes That Passed the Ballot

The conversation around cannabis in the North Bay continues. Various cities and unincorporated counties that had not entertained a regulated market now recognize its opportunities (and, perhaps, inevitability). This acceptance has made way to the voter’s bracket. Residents of all affiliations have called for local taxations to further solidify the industry.


The midterm election saw taxation increases as councils grappled with how to pay off expenses without burying businesses that have yet to establish themselves. Since the industry already faces a 15% state excises tax rate, it’s a tough balancing act. See what the North Bay leaders came up with as Golden State digs into what has and hasn’t changed for local cannabis taxation!


Sonoma County: No Change


The county maintains taxes made by Measure A in 2017. The starting tax for cultivation business ranges from $1-$12 per square foot, depending on the structure and cultivation type. Other businesses on the cannabis supply chain vary in gross receipt tax. Manufacturers pay a 3% tax and retailers pay 2%.


The measure ensured that the rate could not rise above 10% for gross receipts on cannabis businesses, nor could it surpass a $25 tax per square foot of cultivation sites.



Santa Rosa: Measure O


Measure O’s temporary tax will last until the year 2025, and affects all Santa Rosa registered businesses. It will add a 0.25% to the general sales tax, raising the total to 8.875%. All money raised by this tax will be added to the city’s general fund at the hopes of ebbing away at the financial deficit while providing much needed funding to its various departments.


Measure D in 2017 issued taxes for cannabis businesses still in effect. Current gross receipt rates are 3% for recreational (and 0% for medical)  retailers, 2% for cultivators (or $5 for each square foot), and 1% for manufacturing. Transport services are currently at 0% but must pay the standard business tax.  


San Francisco: Prop D


This proposes new taxes for any cannabis business receiving gross receipts from operations with the city, even if they reside in a separate location. The rate for these taxes could range between 1-5.%

 

The tax will not affect the first $500,000 of gross receipts or medical cannabis retail businesses, and will not take effect until 2021 to give the industry the opportunity to grow.


Marin County: Still Prohibited


In 2016, Marin County adopted Ordinance No. 3664 and prohibited the development of any non-medical cannabis businesses that would require a state license to be licensed with the county.


San Rafael: Measure G


San Rafael enacted a new cannabis excise tax on gross receipts for any businesses licensed with the city. The rate is limited to up to 8% for cannabis businesses, and all proceeds will go to the city’s regulating cannabis program as well as its fire and safety services.


Solano County: Still Prohibited


Currently Solano County has extended its moratorium. The county does not allow any cannabis business licensing or cultivation in the unincorporated county.


Suisun: Measure C


This local general commercial cannabis tax has a rate of up to 15% of gross receipts for various parts of the cannabis supply chain. Cultivation sites will have varying rates of no more than $25 per square foot. These will be allocated for public safety and other city funds.


Benicia: Measure E


The city of Benicia will tax an annual rate no more than 6% of gross receipts for all cannabis retailers, manufacturers, and distributors operating within the city. Commercial Cannabis Cultivators will be taxed up to $10 per square foot of their site. These will be used for general public purposes such as the local emergency services, recreation, and police.


Where To Go From Here?


More councils create regulating programs and tax rates with each ballot. Along with this, various officials continue to push toward legality beyond the state level. The North Bay measures and considerable voter turnout prove that residents are open to a commercial cannabis supply chain. While there will always be setbacks in balancing the needs of a new industry with its surrounding community, it appears that cannabis business is here to stay.